By Farm Bureau Financial Services on August 17, 2018

Where to invest money after maxing out your 401(k)

Are you looking for ways to keep building your investment portfolio outside of your 401(k)? Here are some options you may want to consider.


If you qualify based on your adjusted gross income, you may be eligible to contribute up to $5,500 ($6,500 if you’re 50 or older) to traditional or Roth IRAs. You’ll want to consider your own financial situation before choosing between the
two options.

The main difference between the traditional IRA and the Roth IRA is the timing of tax breaks. With a traditional IRA, you pay taxes when you make withdrawals/take distributions; for a Roth IRA, you pay taxes upfront when you make contributions. For a traditional IRA, your investment earnings grow tax-deferred, while your investment earnings grow tax-free in a Roth IRA. A financial or tax professional can help you decide which is right for you.


Looking for ways to reach your retirement goals while diversifying your investment portfolio? Mutual funds can be a great, long-term way to start making your financial goals a reality. With diversification, professional management and liquidity, investing in mutual funds may be a good way for your extra cash to work for you. Keep in mind diversification does not protect an investment from market risks and does not ensure a profit. Talk to a Farm Bureau agent about our expansive offering of mutual funds and which might be a good fit for your financial goals.


Another option to consider is whether to add an annuity to your portfolio. It can be a good option for accumulating funds for retirement either as a funding vehicle for Roth or non-qualified funds. Annuities are designed to pay a steady stream of income in your retirement, which makes them great vehicles for accumulating money. So, when it comes to filling the gaps of your retirement income, an annuity may be able to help.


When thinking about ways to achieve the retirement of your dreams, life insurance may not be the first thing that comes to mind. But, some types of permanent life insurance policies build a cash value over time and an help provide supplemental income in retirement — possibly even tax-free.


A tax-advantaged college savings plan like a 529 plan or the Coverdell Education Savings Account (ESA) may be a good option for stashing away a little extra cash for your child’s higher education.


When choosing how to invest your money, it’s important to understand your situation and the risk level you’re most comfortable with. And you don’t have to go it alone. Before you begin, connect with a Farm Bureau agent to discuss your financial goals.