Investing in Your Goals

Investing may seem like a complicated process requiring lots of time, energy and knowledge. After all, looking at those acronyms, arrows, colors and numbers can be pretty intimidating for a new investor. The good news is that there are plenty of ways to invest. In fact, you’re probably already an investor, whether you know it or not.

Investing isn’t just about stocks and bonds and buying and selling. According to the Oxford English Dictionary, ‘to invest’ essentially means to give with the expectation of receiving: to put money into something and expect a profit, to devote something of yours for a worthwhile result.

You invest in your job, expecting a paycheck. Now it may be the time to invest your paycheck and save for your future long-term goals.

Here are a few common objectives of investors and how we can help.

Invest in Your Future
As our money coaches like to say, it’s never too early or too late to start saving for retirement. Everyone wants a better, brighter future, and investing through a company-sponsored retirement plan can be a great way to start. Here are a couple different options for retirement investments:

• Employer Sponsored Retirement Plans (E.g. 401(k), 403(b), Thrift Savings Plan, etc.) – Invest in your employer-sponsored retirement plan and you might even get an employer matching contribution! Many employers will match (up to a certain point) the amount an employee contributes. Many plans also give employees an option between establishing a traditional versus a Roth retirement account. Employer matching contributions may be subject to a vesting schedule that can reduce or eliminate employee access to employer contributions if they leave the employer within a certain timeframe. See your Plan Document or speak with your Plan Administrator to understand your employer matching contributions.
• Individual Retirement Account (IRA) – If you don’t have a company-sponsored retirement plan, you may want to set up an IRA on your own. There are two types of IRAs, traditional or Roth. Take a look at this IRS.gov chart to compare and decide which might be right for you: https://www.irs.gov/retirement-plans/traditional-and-roth-iras. Keep in mind that the IRS limits how much you can annually contribute to an IRA, as well as whether you are eligible to contribute based on income. You decide how you want to invest your IRA. Your Money Coach can help you understand your investment options when it comes to your retirement accounts and speak to any other retirement planning questions you might have.

Invest in Higher Education
One of the most important investment disciplines, for any investor to adopt, is saving for future goals as far in advance as possible. If you start saving for retirement in your 20’s, you might have a much better chance of funding whatever retirement lifestyle you prefer. In much the same manner, if you can start saving for college expenses when your child is born, you will likely be much more prepared for their college costs down the road.

Here are a few investment accounts you may want to consider that can help you reach your college savings goals:

• 529 Plan – There are two types of 529 Plans: Savings and Prepaid Tuition. Each state can offer a 529 Savings Plan that may or may not have state tax incentives, and each state chooses the investment options within the plan. There are very generous contribution limits; investments may grow tax-free, and disbursements are generally tax-free as long as proceeds are used to cover qualified education expenses as defined by the IRS. Prepaid Tuition plans are different in that a parent purchases credits or semesters for future use at an eligible public university – but at today’s prices.
• Coverdell Education Savings Account – The Coverdell account uses a broader definition of qualified education expenses, but it also has a very low limit for annual contributions.
• Roth IRA – Because you use post-tax dollars to contribute to a Roth account, you have some flexibility with how you might use those investment dollars before retirement. If you choose to use some portion of your contributions (not the earnings) for college expenses, you can do so; however, there are pros and cons to consider including the potential impact to a financial aid award. Your Money Coach can review the options with you so that you can feel confident in your decision.

Want to know how much you should save for college and other life goals?  Check out our handy dandy calculators.

Educate Yourself on Investing

Investing your hard-earned savings to achieve your long-term goals doesn’t have to be a difficult, tedious process – especially when you have a Money Coach to educate you and keep you on track. Money Coaches have years of experience, multiple credentials, and can talk about virtually any financial topic. Want more information about 529 Plans or a Coverdell? Talk with a Money Coach who is a College Planning & Student Loan Specialist. Want help deciphering which type of IRA is best for you? Work with a Money Coach who is a Retirement Specialist.

Together, you and your Money Coach can increase your financial know-how and create an action plan tailored to your lifestyle, so you feel more confident when it comes to investments and making a plan to achieve your long-term goals. Call 888-724-2326 to get started today.

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