![]() Max out your 401(k) and tax-favored investment options. When you have extra money to invest, the first step is to max out your 401(k) and/or Roth IRA.That’s great! Next, you can think about putting your retirement savings into high gear and consider other investing options. If you’re still not saving 15% of your income with those options, then go back to your traditional 401(k) and invest the rest there if you can. Then, if you qualify to contribute to a Roth IRA, max that out. Traditional: If you don’t have a Roth 401(k), invest up to the match in your traditional 401(k). ![]() And the majority of your Roth 401(k) or Roth IRA balance is likely to be growth at retirement age. A Roth lets you make contributions with after-tax money, and then you have tax-free growth and tax-free withdrawals in retirement. Roth: Second, do all the Roth you can through employer-sponsored or individual accounts.Fully vested simply means 100% of your employer’s contribution belongs to you, and whether you’re fully vested right away or over time varies by employer. You can think of it as a 100% return on investment-if your match is fully vested. Who wouldn’t? So, if your employer offers a match with their retirement plan, invest enough to get it all. Match: We will always take free money.And the way we look at it, a company match beats Roth beats traditional. If you have access to an employer-sponsored retirement plan like a 401(k), you can start there. Not sure where to begin? It depends on the choices available to you and your eligibility. We recommend that you invest 15% of your income into tax-advantaged retirement savings accounts.
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