Retirement is a crucial time in every person’s life when they will have to rely on their savings and investments to maintain an acceptable quality of life. However, not everyone has access to a 401(k) plan. Fortunately, there are several other ways to save for your golden years.
Individual Retirement Account (IRA)
One alternative to an employer-sponsored 401(k) retirement account is to start an IRA which does not require an employer to be involved. There are two types of IRAs: Traditional and Roth. Each type has different tax advantages which your financial advisor can explain to you.
Design a smart budget
The first step to saving for retirement is understanding your current financial situation. This means creating a budget for tracking your income and expenses and help you understand where your money is going. Once you have a strong understanding of your financial situation, you can start looking for ways to cut back on expenses and put more money towards your retirement savings.
High-yield savings account
This type of account is a simple and safe way to save money for retirement. High-yield savings accounts offer higher interest rates than traditional savings accounts, making your money grow faster. You can easily access your funds if you need to and many times there are no fees or minimum balance requirements.
Invest in the stock market
Investing in the stock market is another option for those who do not have access to a 401(k). There are several ways to invest in the stock market, including individual stocks, exchange-traded funds (ETFs) and mutual funds. Before investing, it is important to educate yourself on the stock market and to understand the risks involved.
Real estate investing
Real estate can be a good way to save for retirement, as it can provide a steady stream of passive income. There are several ways to invest in real estate, including rental properties, real estate investment trusts (REITs) and flipping houses. It is important to understand the risks involved and to do your research before investing in real estate.
Side jobs and freelance work
If you have a skill or a talent you can monetize, consider starting a side hustle or freelancing. This can be a great way to supplement your income and to put more money towards your retirement savings.
Having an emergency fund is important for both your short-term and long-term financial stability. An emergency fund can help you avoid going into debt if you face an unexpected expense, such as a medical emergency or a job loss. This can also help you avoid dipping into your retirement savings and potentially jeopardizing your financial future.
Let us help determine which type of retirement accounts can work you.
The foregoing information is not a statement of all available data necessary for making an investment decision, and it does not constitute a recommendation. Any opinions are those of the author and not necessarily those of Raymond James. Expressions of opinion are as of this date and are subject to change without notice. There is no guarantee that these statements, opinions or forecasts provided herein will prove to be correct. Investing involves risk and you may incur a profit or loss regardless of strategy selected. 401(k) plans and IRA’s are long-term retirement savings vehicles. Withdrawal of pre-tax contributions and/or earnings will be subject to ordinary income tax and, if taken prior to age 59 1/2, may be subject to a 10% federal tax penalty. Real estate investments can be subject to different and greater risks than more diversified investments. Declines in the value of real estate, economic conditions, property taxes, tax laws and interest rates all present potential risks to real estate investments. Investing in stocks always involves risk, including the possibility of losing one’s entire investment. Investors should consider the investment objectives, risks, charges and expenses of an exchange traded products and mutual funds carefully before investing. The prospectus contains this and other information and should be read carefully before investing. The prospectus is available from your investment professional.