Maxing Out Your 401k Contributions? 3 Other Options

When making retirement account contributions, 401k accounts have very strict rules as to how much you can contribute each year. If you are maxing out your contribution, there are some other options for you to consider.

1. Roth IRA

One of the best options that you have when you are maxing out your 401k contribution is to start a Roth IRA. With a 401k, you are taking advantage of pretax contributions to your retirement. With a Roth IRA, you will be diversifying your tax situation by taking advantage of an after-tax retirement account. Any gains that you make from investing with this type of account will be tax-free. You also will not have to pay any taxes when you start taking withdrawals upon retirement.

2. Mutual Fund Account

Another option that you have is to use after-tax money to fund a mutual fund investing account. Investing in mutual funds over the long term can provide you with a great way to supplement your retirement savings. They are diversified enough to limit risk and provide you with steady growth.

3. Bonds

Another option that you might consider is to purchase government bonds. Bonds provide you with a very low-risk form of investment. They also will give you a steady rate of return over the long term.

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