Putting money into retirement accounts so you have money to support yourself in retirement is one of the smarter things you can do to prepare to retire. Different retirement accounts have different limits that govern how much money you can put in them in any given year. You should max out your contributions if you can, but what if you still have some money you want to put toward retirement? Where can you put it?
A Taxable Brokerage
If you’ve maxed out your retirement account contributions, consider putting money in a taxable brokerage account. A taxable brokerage account is used to trade ETFs, stocks, bonds, and mutual funds. These accounts are referred to as taxable accounts because any profits they accrue are subject to capital gains tax.
Unlike retirement accounts, taxable brokerage accounts don’t have limits on how much you can contribute or how many accounts you can have. That can make them a great option if you have a lot of extra money you want to invest.
An FSA or HSA
Healthcare expenses are one of the biggest expenses that retirees have to deal with. They only tend to increase as you age. Putting money aside into an HSA or FSA can make it easier to pay for healthcare.
These accounts can pay for most health expenses your insurance doesn’t cover. While both accounts can be used to pay for healthcare expenses, there are some significant differences in how they work. Learn about them so you know which type of account is best for you.
Physical Assets
Stocks, bonds, and mutual funds are some of the most common ways to invest, but they aren’t the only ways to invest. Diversifying your investment portfolio gives you greater security, so consider investing in physical assets. This might include things like land, precious metals, and real estate. Owning land and real estate can be an especially good way to generate income since you can rent them out. Don’t feel up to managing the property yourself? Hire a property management company to handle day-to-day affairs.
Retirement accounts are a great way to build financial resources that you can rely on when you retire. They aren’t the only way to set money aside for the future though. If you’ve maxed out your retirement accounts, there are other avenues that you can pursue to build wealth for retirement. Talk to a financial advisor if you have any questions about the options that are best for you.
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