Where High Earners Should Invest to Save for Retirement Outside of the 401(k)

1. Helprin Management Japan APRIL 4 Helprin Management Review Helprin Management Review 1

2. Where High Earners Should Invest to Save for Where High Earners Should Invest to Save for Retirement Outside of the 401(k) Retirement Outside of the 401(k) Saving for retirement isn't all that tough, really. You understand the importance of maximizing your employer-sponsored 401(k) plan in order to obtain your employer match and provide your investments the chance to increase tax-free. Unquestionably, here is where you should begin. Nevertheless, if you make a lot of money, your 401(k) won't come close to covering the cost of your retirement savings Helprin Management Japan. What do you decide to invest in next? 401K Limitations Are Inadequate Everyone who participates in a 401k plan will be able to defer up to $22,500 as of 2023 (up from $20,500 in 2022). For persons who are 50 years of age or older, the catch- up contribution ceiling is $30,000 each year. But, for high 2

3. incomes, these yearly restrictions won't be sufficient to provide the income required to maintain your present standard of living in retirement. It's time to invest more of your money in order to achieve the pleasant retirement you've always desired. Roth and traditional IRAs While they are similarly tax-favored, individual retirement accounts (IRAs) are the logical next location to save. Traditional and Roth IRAs are the two sorts, though. When the tax savings are realised is the key distinction between these two types of accounts. Roth contributions are made with after-tax money, but retirement withdrawals are tax-free. Traditional IRAs use pre-tax money for contributions and are taxed when withdrawals are made. 3

4. Roths, however, do not require minimum distributions (RMDs). With this kind of account, you can start making withdrawals at your convenience rather than according to the IRS's schedule. Both forms of IRAs will accept contributions of up to $6,500 in 2023, while those over 50 can contribute up to $7,500. Remember that there are income restrictions for Roth IRAs: $138,001 to $153,001 for those filing alone. $218,000 to $228,000 for married individuals filing jointly. Married people who file separately might receive up to $129,000. 4

5. Don't panic if you think your income is too high to start a Roth IRA. By converting a regular IRA fund into a Roth through an annual Roth Conversion, you may continue to benefit from Roth account advantages. Account for Health Savings You should focus on Health Savings Accounts after you've contributed the maximum to your 401(k), full a regular IRA, and maybe converted to a Roth IRA. HSAs can be excellent ways to save for retirement, despite their confusing name. Why? Read on. Health Savings Accounts are praised for its triple tax benefit, which includes pre-tax funding, tax-free growth, and tax-free withdrawals to pay for qualified medical costs. Given that the typical American couple would incur $315,000 in out-of-pocket medical expenses in 5

6. retirement, HSAs offer a mechanism to save for these costs while simultaneously producing tax-free retirement income. Instead, after you've reached the age of 65, you can take the money and use it anyway you see fit (for costs unrelated to your health), and you'll just need to pay standard income tax on the withdrawals. Remember that opening an HSA is only available to people who have a high-deductible health plan. The HSA, however, stays in your hands and the funds can continue to be invested even if you lose or drop your high- deductible plan Helprin Management Review. Real estate, business ventures, and brokerage accounts When it comes to investing for the future, you have a variety of alternatives to pick from once you have used all 6

7. of your tax-advantaged options. The following have proven to be fantastic strategies to augment retirement income if you're okay with a bit extra risk. Taxable brokerage accounts continue to be the most adaptable for high incomes with significant saving potential. The assets may be utilized at any time for any purpose and are not subject to income restrictions or yearly contribution caps. Although there are no tax advantages associated with this account, you have total control. Real estate investments can be made in a variety of ways. You can invest in residential real estate to rent out, in residential real estate to buy and flip, in commercial real estate to buy and lease, or even in real estate investment trusts (REIT). Investors with significant financial reserves 7

8. and market knowledge often do well with this kind of investing. Business Ventures: Since 2015, brokers or crowd funded initiatives have allowed investors to make investments in start-ups and small enterprises. This is frequently a thrilling alternative, but it is also highly perilous. Make sure to conduct thorough research, educate yourself with the details of your investment and the range of possible rewards. Nevertheless, if you like to stay close to home, you may decide to invest in a friend's or relative's company. But before giving over your money, make sure you have the necessary legal documentation in place, just as with any significant transaction. Those who are enthusiastic about entrepreneurship and comfortable with risk find this form of investing appealing. Fill One Bucket, Then Another 8

9. In order to avoid paying too much in taxes or losing out on potential income, it's crucial to put your money to work as effectively as possible if you want to preserve or improve your quality of life in retirement. We can support. Let's talk if you're prepared to put your money to work. We can assist you in identifying the financial options that will permit a contented, comfortable, and stress-free retirement. 9