401(k) and Beyond: Where to Invest Money After Maxing Out Your 401(k)

If you’ve taken full advantage of a 401(k) and are looking for ways to keep building your investment portfolio, here are some options you may want to consider. 

Traditional or Roth IRA

If you qualify based on your adjusted gross income, you may be eligible to contribute up to $5,500 ($6,500 if you’re 50 or older) to traditional or Roth IRAs. You’ll want to consider your own financial situation before choosing between the two options.

The main difference between the traditional IRA and the Roth IRA is the timing of their tax breaks. With a traditional IRA you pay taxes when you make withdrawals/take distributions, and for a Roth IRA you pay taxes upfront — when you make contributions. For a traditional IRA, your investment earnings grow tax-deferred, while your investment earnings grow tax-free in a Roth IRA. A financial or tax professional can help you decide which is right for you.   

Mutual Funds

Looking for ways to reach your retirement goals while diversifying your investment portfolio? Mutual funds can be a great, long-term way to start making your financial goals a reality. With diversification¹, professional management and liquidity, investing in mutual funds may be a good way for your extra cash to work for you. Talk to a Farm Bureau agent about our expansive offering of mutual funds and which might be a good fit for your financial goals.

Annuities
Another option to consider is whether or not to add an annuity to your portfolio. It can be a good option for accumulating funds for retirement either as a funding vehicle for a ROTH or non-qualified funds. Annuities are designed to pay a steady stream of income in your retirement, it can also be a great vehicle for accumulating money.  So, when it comes to filling the gaps of your retirement income, an annuity may be able to help.

Interested in learning more about annuities? For more information, check out: A Paycheck for Life: Decoding Annuities.

Life Insurance

When thinking about ways to achieve the retirement of your dreams, life insurance may not be the first thing that comes to mind. But, some types of permanent life insurance policies build a cash value over time and can help provide supplemental income in retirement — possibly even tax-free.

College Savings Plan

A tax-advantaged college savings plan like a 529 plan or the Coverdell Education Savings Account (ESA) may be a good option for stashing away a little extra cash for your child’s higher education.

Learn more here about the differences between the 529 Plan and the ESA: Find the Right College Savings Plan for Your Family

Still Unsure What’s Right for You?

When choosing how to invest your money, it’s important to understand your situation and the risk level you’re most comfortable with. And you don’t have to go it alone! Before you begin, connect with a Farm Bureau agent or advisor to discuss your financial goals.

Sources:

https://www.nerdwallet.com/article/roth-or-traditional-ira-account

¹Diversification does not protect an investment from market risks and does not ensure a profit.

Investors should consider the investment objectives, risks, and charges and expenses of a fund carefully before investing. Prospectuses containing this and other information about the fund are available by contacting your registered representative. Please read the prospectuses carefully before investing to make sure the fund is appropriate for your goals and risk tolerance.

Agent must be a registered representative of FBL Marketing Services, LLC to discuss mutual funds or college funding options. Neither the Company nor its agents give tax, accounting or legal advice. Consult your professional adviser in these areas.