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Daily Court Reporter - News Other retirement savings options exist beside 401(k)s and IRAs


Other retirement savings options exist beside 401(k)s and IRAs

ELISSA COLLOPY, Daily Reporter Staff Writer

One of the largest financial hurdles individuals face is planning for retirement.

Aside from the common employer-sponsored plans such as 401(k) or 403(b), there are several other ways to save for retirement including brokerage accounts, annuities, real estate and small business ownership according to Investopedia, a financial education website.

Brokerage accounts, unlike 401(k)s and IRAs, don't offer tax deferrals but do present an opportunity to invest.

They offer a wide range of investments including individual stocks and bonds, mutual funds, exchange-traded funds, real estatement investment trusts, certificates of deposit and money market funds.

These range from aggressive options (stocks, ETFs and mutual funds), that have more potential to earn above what a traditional savings or checking account can offer, to more conservative options (bonds, CDs and money market funds) that provide stability in the long run.

Tax-deferred annuities also offer another path to retirement goals. This option provides tax deferral coupled with varied investment opportunities offered through insurance companies.

Funds deposited into an annuity grow tax-deferred, but are taxable once distributed throughout retirement. While annuities can provide a guaranteed income to the account holder for a certain number of years in retirement, this option isn't for every investor.

Annuities are contracts with life insurance companies, and are only backed by the claims-paying ability of the issuing company.

Another option is real estate investment, which is best achieved through buying into a fund that itself invests in real estate trusts around the world.

Outside of this option, individuals can purchase real estate outright to generate an income stream during retirement.

One example is the purchase of a multi-family home to rent out one section and live in the other. This will effectively reduce their total living expenses month to month and when managed properly, can result in additional funds. However, this option is more risky due to transactions and upkeep being expensive, and the risk of finding and keeping quality tenants over a long span of time.

Last there is small business investment, which doesn't just mean becoming a business owner. Investing in small businesses can instead come in the form of investing in an already established company as a silent partner.

These investments carry a high load of risk, but are not capped and the potential return on investment is therefore higher than other alternatives.

So when more traditional retirement accounts are unavailable, consumers still have numbers of ways to invest, and it is recommended to hire a financial advisor for any risky investment options, according to Expertise, a research company.

Expertise listed some of the top financial groups in Columbus to help with these investments such as Abel Financial Strategies, Alexander Financial Planning, Artifex Financial Group, Codrea Financial Services and Rebel Financial.

Date Published: January 22, 2018


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