I currently have a 401k with my employer and contribute 7%. If I no longer had the 401k, what would be my options for retirement savings? Ideally keeping the tax deduction benefits I have now. I believe if I kept my contribution percentage the same i'd hit the $5000 limit of an IRA.
In the US, there are several ways to save for retirement:
Tax deferred savings:
These include the individual retirement arrangements (IRA), 401(k) employer sponsored plans and other similar plans (457(b) plans for government employees, 403(b) plans for universities, etc) and self-employed plans (either SEP or SIMPLE IRA or Solo-401(k)).
Tax exempt savings:
These include essentially the same kinds of programs, designated as "Roth" (for Senator Roth who introduced the legislation in 1997).
The are differences in the amounts you can save with each type of the investment vehicle.
For 401(k) and similar, the current maximum allowed for deferral is $17500 a year. However, that doesn't include the employee match. Including the match, the current maximum is $51k a year.
For self employed plans, the maximum is also $51K a year, but is limited to 1/4 of net earnings, i.e.: if you're losing money - you cannot also deduct your retirement contributions from your taxable income.
For non-sponsored plans (IRA) the current limit is $5500 a year.
I.e.: if you don't have access to an employer-sponsored plan and you're not self-employed - you're screwed. If you no longer have access to the 401(k) plan you may not be able to save the same amounts as you're saving now.
The IRA limits are for the deductability of the IRA contributions in the tax-deferral scheme (Traditional IRA contributions) and also for the tax free scheme (Roth IRA) contributions. I.e.: you may be limited as to how much of your Traditional IRA contribution you can deduct (but you can always contribute), but with Roth - you may be limited as to how much you can contribute. However, after 2010, conversion from Traditional to Roth is not limited, so there's a loophole that allows contributing to Traditional IRA a non-deductible amount and then converting it to Roth.
Limits are for totals
Keep in mind that the limits ($17500, $51K and $5500 that I've mentioned) are for totals for both schemes. I.e.: If you contributed $5500 to a Traditional IRA - you have $0 (ZERO) left to contribute to a Roth IRA. If you contributed $10000 to a 401(k) on job A, and you also have a second job B - you only have $7500 left allowed to be contributed on job B. If the job B match is more generous - you may have lost some of the potential match. That happens frequently when people switch jobs after maxing out their 401k at the previous job with inferior matching.