The Mattress Dilemma: Where to Stash Your Savings?
Americans are saving more these days.1 Especially millennials. We know why to save: For emergencies, for retirement, to afford big-ticket dreams like home ownership or opening a business. But how to save is another matter.
Great-aunt Sally used to stash her money under the mattress. So what are the best ways today to protect and grow your savings? How can you sleep better tonight and have greater financial confidence in the morning? See if any of these scenarios sound familiar.
“MY RECURRING NIGHTMARE: I HAVE TO WORK UNTIL I’M 90 YEARS OLD.”
Retirement should be a time to enjoy the life you imagined, and annuities that grow tax deferred can create a guaranteed fixed stream of income for life.2 The payout is partly cost basis and partly gains. The gains portion of the income is typically taxed.3
“NOTHING BOTHERS ME. I SLEEP LIKE A BABY.”
The stock market may be appealing, especially for younger investors. Your investments will fluctuate, but over the long term, may provide potentially higher returns.
“AT 3 AM, I’M AWAKE WORRYING ABOUT THE KIDS’ EDUCATION.”
Besides the important guaranteed death benefit a whole life insurance policy provides, it can also offer tax-deferred accumulation of cash value.4,5In addition, a whole life policy allows access to cash, tax-favored, throughout your lifetime to help realize your dreams—like college for the kids—or to supplement your income during retirement.6
“I CHECK TWICE THAT DOORS ARE LOCKED BEFORE TURNING IN.”
There are many ways to structure a balanced portfolio that can help reduce exposure to market risk, especially as your age increases and risk-tolerance diminishes.7
“I’M ON THE ROAD SO MUCH I FORGET WHAT MY OWN BED FEELS LIKE.”
You work hard for your money. A retirement account can help your money work hard for you. With a 401(k) retirement plan, you invest pre-tax dollars and your employer may even match your contribution. A Roth IRA can be considered for young professionals.8 You’re taxed on the money you invest, but can typically withdraw your earnings tax-advantaged in retirement, a time when your tax rate may be higher.
Investing for maximum growth and minimum risk takes a strategy. And it depends on many variables—your age, family circumstances, lifestyle, goals and priorities, and income level, to name a few. A financial professional can help you make sense of the possibilities and put together a strategy to help realize your dreams.
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2020-109902 Exp. 10/2022