I have maxed my IRA and my employer does not offer a 401k. I am 28 and make 85k/year. Where can I invest my money for retirement? Is a whole life insurance policy the only option remaining? Why is 15k the amount for 401k and only 4k for IRA's?
2007-03-18 13:11:19 · 5 answers · asked by oj 1 in Business & Finance ➔ Personal Finance
There's something called an individual 401k also; however, everything I've read about it says it's for the self-employed. You can do a search for it (also called a "solo 401k) and check into whether or not it's an option for you.
You can also invest in mutual funds.
I'm a licensed insurance agent and while I think life insurance is a wonderful thing, I wouldn't recommend it as purely an investment. It's really designed to protect the people you love from the loss of your income, taxes on your estate, and final expenses.
There's something called variable life insurance that is designed to be as much of an investment as it is life insurance; however, I've yet to see one of those I'd put my money in.
2007-03-18 13:19:50 · answer #1 · answered by ISOintelligentlife 4 · 0⤊ 2⤋
Lots of questions there...You can almost always beat whole life with a diverse selection of Mutual Funds in a brokerage account (even with the associated taxes and buying the exact same amount of term life). You'll want to compare rates of return on whole life. It stinks.
I would make sure I was investing in a ROTH at your age, instead of a traditional IRA.
You could set up a brokerage account and just start pouring the money in. You could purchase rental real estate to shelter some growth from taxes. Of course, paying off your car and your personal residence will also lead to more financial flexibility going forward. Sounds like you are doing great. Keep it up!
B
2007-03-18 13:20:32 · answer #2 · answered by Brad L 4 · 0⤊ 0⤋
Whole life is not the only option. That being said it is a great option, but only with a few comanies.
Be sure only to buy a policy from a mutually owned insurance company. One of the following, Northwestern Mutual, New York Life, Mass Mutual or Guardian Life are all great options. These policies will never decrease in value and all of these companies pay strong dividends on their policies.
Another great advantage is how you can access the cash, tax free, with little or no charges.
Lastly, very few investments will grow so greatly in value in your later years like these. For example, if you simply invest in tax free funds, at some point in your life you are going to want to be more conservative with your money. With whole life policies, the greatest returns are in the later years which can be 10 to 20 times the amount you pay in annually, no other financial instrument will do that for you.
2007-03-18 16:20:26 · answer #3 · answered by Michael R 1 · 0⤊ 2⤋
Okay, so you mean that you maxed out your contributions for the year, right? Are we talking about the year 2006 or 2007?
2007-03-18 13:14:35 · answer #4 · answered by Emily Dew 7 · 0⤊ 0⤋
Another vote to forget about whole life. If you are afraid of taxes, contact www.troweprice.com or www.vanguard.com, or wwwfidelity.com and ask them about their tax-efficient mutual funds.
2007-03-18 13:41:24 · answer #5 · answered by gosh137 6 · 0⤊ 0⤋