Making The Right Choices!

401kWhen you want to invest in your future, you have a wide array of options to choose from. All of these can help you to build a secure financial future, but not all of them are right for you. You want to learn about all of the primary choices and then talk to a financial professional to ensure that you make the right decisions for your financial investments.

Learning about the Top Annuities

Annuities are not as popular as they once were because then tend to be more complex than an IRA or 401k. However, companies that offer this type of investment are starting to make a comeback and they are offering new options, such as low-cost variable annuities. Fixed and variable annuities tend to be the most popular. When you have a fixed one, your interest rate remains the same for a set amount of years. If you have a variable type, this will fluctuate.

When you are looking at annuities, you will find that many of them offer an array of extra features. These can include things like death benefits, liquidity options, inflation-adjusted payouts and riders to help finance any future nursing home care. If you are looking for a basic investment, these extras are something you may want to skip. However, if you want a more comprehensive investment portfolio, they are worth looking into.

Learning about IRAs and Why a Roth IRA is Best

IRAs provide you with financial security, but in many ways, the Roth IRA is the superior choice. When you have this type of IRA, you will enjoy tax-free withdrawals and tax-free growth potential. There are other benefits that make this type of IRA the better choice, such as:

a)     When it comes to required distributions, there are no minimums

b)     For your heirs, you can leave them with tax-free money

c)     You can protect yourself against tax increases that occur in the future

d)     When you require, you will have a lot of flexibility because you already paid the taxes on what you have in your Roth IRA account

e)     Having this type of investment account may help you with the Medicare surtax

f)      You can take advantage of the money you put into the account at any time

Learning about a 401k

When you have a 401k, it is sponsored by your employer. You will look at your wages before taxes are taken out and contribute a percentage of this to your 401k. Your employer will match this to a certain amount, in most cases. This allows you to save more and invest more into your account. While you can withdraw from this account early, if you do so before your 59.5 birthday, you will face penalties.

All three of these investments have their advantages and disadvantages. When you are looking at these, consider your personal financial situation and your short-term and long-term financial goals. This gives you a starting point for where you want to start with investing and saving for your future.