Expert advice on investment and retirement accounts

December 31, 2024

(InvestigateTV) — A recent Bankrate survey revealed that 57% of Americans feel behind on their retirement savings. For those looking to enhance their current strategies—or those just starting out—Gloria Garcia Cisneros, a wealth manager at LourdMurray, offers a foundational guide to retirement and investing.

According to Cisneros, there are two primary types of accounts to consider: investment accounts and retirement accounts.

Retirement Accounts

Retirement accounts, such as 401(k)s, 403(b)s, and 457(b)s, are designed for long-term savings. “There are also individual retirement accounts, or IRAs,” Cisneros explained. “These are dedicated to longer time horizons and come with tax advantages. The government encourages saving by allowing your money to grow tax-free until you withdraw it.”

However, she noted that these accounts have annual contribution limits and rules about when funds must be withdrawn, which are important to keep in mind when planning.

Investment Accounts

Investment accounts, also called taxable accounts, offer more flexibility but are better suited for mid-term financial goals rather than long-term retirement savings. “With these accounts, there are no contribution limits—you can put in as much as you want,” Cisneros said. “But you won’t get the benefit of tax-free growth. Depending on your investment activity and the income generated, you’ll pay taxes annually.”

The best type of account—or combination of accounts—depends on your savings goals, Cisneros emphasized. Consulting a financial advisor can help tailor a strategy to your specific needs and circumstances.

Above all, Cisneros stressed the importance of being proactive about saving for the future. A solid financial plan, she said, includes saving for retirement, building an emergency fund, and paying down credit card debt.

 

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