People often look at investing as a risqué or taboo activity that is only for the rich or the strong willed. In reality, investing is an absolute necessity for securing a safe and happy future. Most of us don’t relish the thought of working until we die, and retirement takes a nest egg that usually needs several decades of building in order to adequately fund us into old age. There are so many investment vehicles available to us that we often lose track of our options. Consider some of the ways you can start saving for your retirement below.
I always like to start with the 401k. Most employers offer these accounts to their employees as an additional perk or offering to their usual compensation. It’s even becoming fairly commonplace to offer some sort of a matching contribution as well. For example, if you make $50,000 and they offer matching contributions up to 5% of your salary that means you can contribute $2,500 and they will match it dollar for dollar. This is basically free money, and not taking advantage of it means leaving money on the table.
IRA’s are another great retirement vehicle, and very tax advantageous. A traditional IRA works much like a 401k, in that your funds go into the account on a pre-tax basis, and then later on in life when you start withdrawing from the account they will be taxed at your rate then. The benefit is that you pay less taxes now, and watch compound interest take effect on those pre-tax savings as a whole. A Roth IRA is similar, except you contribute post-tax monies to this account. The benefit is that the interest and capital gains on this type of account can be withdrawn tax free upon retirement. This is a huge benefit and when possible, you should take advantage of both accounts. Just like any other type advantaged account, there are income and contribution limitations, but they often become a bit more generous year after year in order to pace with inflation, so stay tuned on any new updates.
While tax advantaged accounts are always the way to go, they alone will not usually meet your retirement dreams, or even requirements. This is why I like to look at other ways of investing my money. Diversification is a key to keeping a healthy and balanced portfolio. Binary options have become increasingly popular over the past several years. Look at Banc De Binary for more information on how you can put them to work for you. There are also several different online and brick and mortar brokerages that handle investment accounts. Gone are the days where you needed an actual investment advisor. These days you can pay a smaller and more manageable fee and have a robo-advisor handle your savings for you.