Where Should I Invest After Maxing Out My 401(k)?

If you are wondering about ways to invest outside of your company’s retirement plan, you are taking significant steps towards securing financial stability for your future.

1. Consider putting money into a traditional or Roth IRA

An IRA (individual retirement account) is a financial tool that allows you to save for your retirement independently from your job. It should be your top choice for investing beyond your employer’s retirement plan.

For those who may be curious, your Fresno financial advisor will discuss how it is possible to contribute funds to both a traditional or Roth IRA as well as a 401(k) through your employer. The maximum amount that can be invested in IRAs for 2024 is $7,000 ($8,000 for individuals aged 50 or older). 

Step 2: Set up a brokerage account

Have you reached the maximum contribution limit for your 401(k)? Have you also maxed out your IRA? Does this indicate that you have completed all your retirement savings? Don’t jump to conclusions too quickly!

Although it may not be ideal, investing in a brokerage is still a better option than simply stashing your money away. Below are some key benefits of making investments through a brokerage:

No mandatory distributions (RMDs): Unlike a 401(k) or traditional IRA, there is no requirement to start withdrawing funds once you reach a certain age.

No income restrictions: Regardless of your income level, you are able to invest in this account without limitations from the IRS.

Unlimited contribution opportunities: There are no limits on how much you can invest in this account.

3. Purchase property

Aside from investing in the stock market, certain individuals opt to invest in real estate as well. The advantage of real estate is that the majority of properties tend to appreciate in worth over time and can offer a relatively steady stream of rental earnings.

If you believe that you can quickly create your own real estate dynasty by simply watching a few renovation shows or TikTok videos, you will be in for a harsh reality check. The process of purchasing and handling rental properties requires a significant amount of time, finances, patience, and diligence, so it is crucial to fully understand what you are getting into before jumping in.

Conclusion

Determining whether you can truly afford a particular purchase is a critical step in making wise financial decisions. Your financial advisor Fresno, Ca understands that by understanding your financial situation, assessing your income and expenses, considering your financial goals, and creating a budget, you can confidently evaluate whether a purchase aligns with your overall financial well-being.

We have a strong team of professionals helping ensure you receive all the assistance you need not only in developing your retirement income strategy, but in maintaining it throughout your retirement. Contact us today at 559-230-1648 or visit us today at Soutas Financial to get your retirement plans on track for success!

Investment advisory services offered through Foundations Investment Advisors, LLC, an SEC registered investment adviser. The commentary on this website reflects the personal opinions, viewpoints, and analyses of the author, Soutas Financial, and should not be regarded as a description of advisory services provided by Foundations Investment Advisors, LLC (“Foundations”), or performance returns of any Foundations client. The views reflected in the commentary are subject to change at any time without notice. Any mention of a particular security and related performance data is not a recommendation to buy or sell that security, or any security. Foundations manages its clients’ accounts using a variety of investment techniques and strategies, which are not necessarily discussed in the commentary. Foundations deems reliable any statistical data or information obtained from or prepared by third party sources that is included in any commentary, but in no way guarantees its accuracy or completeness.

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These Shocking Retirement Stats Will Motivate You to Action

Are you confident that you’re financially prepared for retirement? Your Fresno financial advisor understands that these shocking retirement stats might just make you think twice. The average life expectancy increasing and the cost of living rising. Because of this, it’s more important than ever to start planning for your golden years. According to recent studies, a staggering 42% of Americans have less than $10,000 saved for retirement.

The Importance of Retirement Planning

Retirement planning is crucial for a secure and comfortable future. It provides you with the opportunity to create a financial cushion that will support you throughout your retirement. Without proper planning, you may find yourself struggling to make ends meet or relying solely on Social Security benefits. This may not be enough to maintain your desired lifestyle. By taking proactive steps now, you can avoid unnecessary financial stress in your retirement years and enjoy the fruits of your labor.

Retirement Saving Statistics

The retirement saving statistics paint a concerning picture of the current state of retirement preparedness. According to various surveys and studies, a significant portion of the population is not saving enough for retirement. As mentioned earlier, 42% of Americans have less than $10,000 saved for retirement, and 21% have no savings at all.

The average retirement savings vary significantly depending on age. Younger individuals typically have fewer savings due to their early career stages. In contrast, older individuals tend to have higher savings due to accumulated wealth over the years. According to a study conducted by the Economic Policy Institute, the average retirement savings for individuals aged 32-37 is $31,644, while those aged 56-61 have an average of $163,577 saved. These figures emphasize the importance of starting early and consistently saving throughout your working years.

Factors That Contribute to Inadequate Retirement Savings

There are several factors that contribute to inadequate retirement savings. One common factor is a lack of financial literacy and awareness about the importance of saving for retirement. Many individuals may not fully understand the long-term consequences of not saving enough.

Conclusion

Understanding the difference between income and net worth is crucial for achieving financial stability and long-term wealth. Your financial advisor Fresno, Ca is committed to helping you understand that while income represents the money you earn on a regular basis, net worth reflects your overall financial health by considering your assets and liabilities. By tracking your income and net worth, you can make informed financial decisions, and work towards achieving financial independence.

We have a strong team of professionals helping ensure you receive all the assistance you need not only in developing your retirement income strategy, but in maintaining it throughout your retirement. Contact us today at 559-230-1648 or visit us today at Soutas Financial to get your retirement plans on track for success!

Investment advisory services offered through Foundations Investment Advisors, LLC, an SEC registered investment adviser. The commentary on this website reflects the personal opinions, viewpoints, and analyses of the author, Soutas Financial, and should not be regarded as a description of advisory services provided by Foundations Investment Advisors, LLC (“Foundations”), or performance returns of any Foundations client. The views reflected in the commentary are subject to change at any time without notice. Any mention of a particular security and related performance data is not a recommendation to buy or sell that security, or any security. Foundations manages its clients’ accounts using a variety of investment techniques and strategies, which are not necessarily discussed in the commentary. Foundations deems reliable any statistical data or information obtained from or prepared by third party sources that is included in any commentary, but in no way guarantees its accuracy or completeness.

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source https://soutas.com/these-shocking-retirement-stats-will-motivate-you-to-action/

How Can I Open a Roth IRA?

Are you interested in saving for retirement and enjoying tax-free growth of your investments? Opening a Roth IRA could be the perfect solution for you. With a maximum word count of 160, let’s dive into how you can open this type of retirement account and start securing your financial future.

What is a Roth IRA?

Your Fresno financial advisor will discuss how a Roth IRA is a popular retirement savings option that offers unique advantages. Unlike a traditional IRA, contributions to a Roth IRA are made with after-tax dollars, meaning your withdrawals during retirement are generally tax-free. This can result in significant savings over time.

One of the key benefits of a Roth IRA is its flexibility. While traditional IRAs require you to start taking withdrawals at a certain age, known as the required minimum distribution (RMD) age, Roth IRAs have no such requirement.

Benefits of Opening a Roth IRA

There are several benefits to opening a Roth IRA that make it an attractive retirement savings option. Firstly, as mentioned earlier, the tax-free growth of your investments is a major advantage. By contributing after-tax dollars, you can enjoy the potential for significant tax savings in the long run.

Another benefit is the ability to choose from a wide range of investment options. With a Roth IRA, you have the freedom to invest in various assets such as stocks, bonds, mutual funds, and exchange-traded funds (ETFs). This allows you to diversify your portfolio and potentially maximize returns.

Eligibility Requirements for a Roth IRA

Before opening a Roth IRA, it’s important to understand the eligibility requirements. As of 2021, the income limits for contributing to a Roth IRA are as follows:

For single filers: the ability to contribute to a Roth IRA phases out for individuals with a modified adjusted gross income (MAGI) between $125,000 and $140,000.

For married couples filing jointly: the phase-out range is between $198,000 and $208,000.

It’s worth noting that there are no age restrictions for opening a Roth IRA. This means that even if you’re already retired, as long as you have earned income, you can still contribute to a Roth IRA.

Steps to Open a Roth IRA

Opening a Roth IRA is a relatively straightforward process. Here are the steps you need to follow:

Gather necessary documents and information: You’ll typically need to provide personal details, such as your Social Security number, date of birth, and employment information. Have these documents ready before starting the application process.

Complete the application: Fill out the required forms and provide the necessary information. This may include selecting the type of account (individual, joint, or custodial) and designating beneficiaries.

Fund your account: Decide how much you want to contribute as an initial deposit. Remember to stay within the annual contribution limits.

Review and confirm: Carefully review your application and make sure all the information is accurate. Once you’re satisfied, submit your application.

After completing these steps, your Roth IRA will be open and ready for funding.

Conclusion

Choosing the right mutual funds is a critical step in achieving your financial goals. By understanding different fund types, assessing risk and return, and considering key factors, you can make informed investment decisions. Your financial advisor in Fresno, Ca is committed to helping you remember to conduct thorough research, analyze performance metrics, and diversify your portfolio to optimize returns and manage risk.

We have a strong team of professionals helping ensure you receive all the assistance you need not only in developing your retirement income strategy, but in maintaining it throughout your retirement. Contact us today at 559-230-1648 or visit us today at Soutas Financial to get your retirement plans on track for success!

Investment advisory services offered through Foundations Investment Advisors, LLC, an SEC registered investment adviser. The commentary on this website reflects the personal opinions, viewpoints, and analyses of the author, Soutas Financial, and should not be regarded as a description of advisory services provided by Foundations Investment Advisors, LLC (“Foundations”), or performance returns of any Foundations client. The views reflected in the commentary are subject to change at any time without notice. Any mention of a particular security and related performance data is not a recommendation to buy or sell that security, or any security. Foundations manages its clients’ accounts using a variety of investment techniques and strategies, which are not necessarily discussed in the commentary. Foundations deems reliable any statistical data or information obtained from or prepared by third party sources that is included in any commentary, but in no way guarantees its accuracy or completeness.

The post How Can I Open a Roth IRA? appeared first on Soutas Financial.

source https://soutas.com/how-can-i-open-a-roth-ira/