The market was down 2.4% last week, as employment growth and retail sales remain stronger than expected. Mortgage rates have crossed over 8%, and many are expecting the Federal Reserve Bank to increase interest rates again in November. Remember that investing is a long-term game, and stick with your financial plan.
As part of that plan, here’s four ways to save for retirement: First, be sure you are contributing enough to your employer-sponsored plan (like a 401(k), 403(b), or TSP) to receive the full match from your company. If you’re married, both of you should be contributing to your plans at work. Your plan likely has a Qualified Default Investment Alternative, meaning all you have to do is sign up, and the plan can invest for you based on your birthdate. While I would encourage you to review this default with your advisor, it’s a good place to start if you aren’t already contributing.
A second way to save is to contribute to an Individual Retirement Account, or IRA. Talk with your advisor and tax professional to see if you should open a traditional or Roth IRA. You may also be able to convert after-tax contributions to a Roth if you are over the income limit for Roth contributions. If you’re under 50, you can contribute $6,500, with an extra $1,000 if you’re 50 or older.
The third savings option is to contribute after-tax dollars to your employer plan, if the plan allows for it. Many plans allow in-plan conversions, so the money you put in after-tax can be converted to the Roth portion of your account. Total contributions, including the employer match, are limited to $66,000, or $73,500 if you’re 50 or older.
The fourth and final way to save is in a regular investment account. The advantage with this account is the flexibility. You’re not penalized if you take money out prior to 59 ½, which means you can use this for early retirement, or other goals like college, travel, or a second home.
Your action item this week is to mow your leaves. Using a mulching mower to help the leaves decompose faster returns nutrients to your lawn, reducing the need for fertilizer, saving you time and money.
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CovingtonAlsina is a registered investment adviser. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and, unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Past performance is not indicative of future performance.
 MarketWatch, S&P 500 breaks below key level, by Joseph Adinolfi, 10/20/23