Investing

Tax-Advantaged Investments: Putting You on the Right Path for Comfortable Senior Living

Thinking about the future can be difficult, but there are ways to properly navigate the financial planning process that can help individuals be ready for the day they retire. This goes further than just throwing a bunch of money into a vault before it can be opened and spent. The savings process has many facets, and investing is a big part of it. Tax-advantaged investments may be one way to kick savings into high-gear. 

All of us at WFG understand individuals needs and worries when it comes to having enough money to protect their financial needs. This can be improved by investing in a number of different policies. Having a strategy where the individual can earn savings in many different ways will give them a better chance of being financially successful in life. 

What is a tax-advantaged investment?

Having a diverse investment strategy is an important aspect of an individual’s retirement policy, but there are some specific option that can really benefit when it comes to money saving. These are tax-advantaged accounts, and they help consumers invest in a manner that does not include tax as the money grows in the account, or the taxes are deferred. 

Types of Tax-advantaged investments
There are many different kinds of these investments, and whether a person chooses to use one, two or more of them, it is likely they will have a notable effect on their lives. This can be important, as long as the account holder uses them in a way where they continue to build wealth. While there are multiple types of plans, some that may be beneficial for young people are: 

  • Annuities – These options can differ significantly, but they do have some tax benefits. Investors won’t have to pay tax on these items until they are taking out their money, but there are some fees that can happen beyond this, depending on the investment agreement.
  • 529 College Savings Plan – Having this type of plan can be beneficial, as many states do offer a tax break on these items while the policyholder accrues money. This is geared toward the parent, not the child, and it can be a good way to maximize savings for the future, even if it is helping a son or daughter get through school.
  • Health Savings Account – This investment option not only helps an individual save for potential medical bills later in life, but it is also not taxed as aggressively as most investment plans. This is because a number of deductions are available. Getting one of these policies is structured for those who have a health plan with a higher deductible than most. 

Having these types of financial tools can be valuable for long term planning in an individual’s life, and it can put them in a position of success later on.

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