Updated: Mar 22
There are six common fundamental ways to build wealth or save for Retirement. Each of the six options provides good growth, but depending on your individualized current net-worth, some strategies may prove more risky with diminishing returns.
401k, 403b, or IRA
Both 401k and 403b plans have limits on how much an employee can contribute to them (i.e., maximum 401k contribution limits). For 2019, your total contributions to all of your traditional and Roth IRAs cannot be more than $6,000 ($7,000 if you’re age 50 or older).
Volatility, Timing, and Overconfidence; the three words combined make for your stock market strategy. Depending on your current net-worth, placing money into this category can build wealth, or for many, cause you to stay employed well into your senior years. " Achieving significant stock market gains, only to lose them when a disastrous event occurs, is devastating – and often unnecessary."
Just as stocks come with levels of risk, mutual funds share in that risk as well. Depending on your current net-worth, are you fully prepared to fund your retirement if your mutual fund failed to produce?
If you watch Television or listen to the radio, you've probably heard an advertisement about flipping homes with little to no money out of pocket. While anything is possible; one of the five mistakes that can make a house flip go bad is "not having enough money," says Investopedia.
Permanent Life Insurance
The one topic that can help secure your financial future, while you dabble into your other wealth building, retirement strategies; is by bundling an Indexed Universal Life Insurance policy into the mix.
The Bottom Line
Half of Americans (48 percent) don’t think their retirement savings will ever reach $1 million, according to a recent study by Fidelity, even though more than 30 percent of Americans expect to need more than $1 million to live on after they stop working. Are you creating guarantees with your retirement strategy?
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