Episode #452

If you’re new to personal finance, investment accounts can seem complicated. The terms, the lingo—HSA, Roth, IRA, 401(k)—these may seem like letters in an arbitrary order, but using these retirement and investment accounts can help you reach financial freedom faster, pay WAY less in taxes, and maximize your money even while you’re asleep. So, how do you get started? Tune in; we’ll show you how!

Joining us is early-retired CFP (Certified Financial Planner) Kyle Mast to walk through each retirement, investment, and savings account you MUST have on your road to FIRE. In today’s episode, we’ll touch on the common accounts you’ve heard of, like the 401(k) and IRA, as well as some lesser-known investing and savings accounts that can help your money grow faster than you thought possible.

And whether you’re just starting your retirement journey in your 40s, 50s, or 60s, or you’re a twinkly-eyed twenty-something-year-old ready for compound interest to run its course, you’ll get EVERYTHING you need to know about investing and retirement accounts from this episode.

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00:00 Intro

00:56 Money Moment

01:42 401(k)s

14:37 Traditional IRAs

21:37 Roth IRAs and Roth 401(k)s

27:51 HSA (Health Savings Accounts)

31:22 High-Yield Savings Accounts (HYSA)

35:37 After-Tax Brokerage Accounts…(read more)

LEARN MORE ABOUT: IRA Accounts

INVESTING IN A GOLD IRA: Gold IRA Account

INVESTING IN A SILVER IRA: Silver IRA Account

REVEALED: Best Gold Backed IRA

The road to financial freedom can be a challenging one, but with the right investment accounts in place, you can greatly increase your chances of achieving your financial goals. From saving for retirement to building wealth for the future, here are the six investment accounts you need for financial freedom.

1. Employee retirement account (401k or 403b):
If your employer offers a retirement plan such as a 401k or 403b, it’s crucial to take full advantage of it. Contributions to these accounts are typically tax-deductible, meaning you can reduce your taxable income while saving for retirement. Additionally, some employers even provide matching contributions, effectively doubling your investment. Start contributing early and consistently, and watch your retirement savings grow over time.

2. Individual retirement account (IRA):
If you don’t have access to an employer-sponsored retirement plan, or if you want to further boost your retirement savings, it’s essential to open an Individual retirement account (IRA). This account allows you to contribute a certain amount each year, and the earnings grow tax-deferred until you start withdrawing during retirement. Traditional IRAs offer tax deductions on contributions, while Roth IRAs offer tax-free withdrawals in retirement.

3. Taxable Investment Accounts:
While retirement accounts have their advantages, you may also need taxable investment accounts to fund other financial goals. Whether it’s saving for a down payment on a new home, starting a business, or just building additional wealth, taxable investment accounts offer flexibility and liquidity. Though these accounts don’t provide the same tax advantages as retirement accounts, they still provide opportunities for growth and diversification.

4. Health Savings Account (HSA):
A Health Savings Account (HSA) allows individuals with high-deductible health plans to save for medical expenses. Contributions to an HSA are tax-deductible, and withdrawals for qualified medical expenses are tax-free. However, what makes an HSA even more appealing is its potential as a long-term investment account. With the option to invest the funds within the HSA, you can grow your savings and potentially use them for other purposes, such as funding retirement healthcare expenses.

5. Education Savings Account (ESA):
For parents or future parents, an Education Savings Account (ESA) is a valuable investment account to consider. This account allows you to save for qualified education expenses, including elementary, secondary, and higher education expenses. Contributions are not tax-deductible, but the earnings grow tax-free, and withdrawals for qualified education expenses are also tax-free. Start saving early to give your children a head start in their educational journeys.

6. 529 College Savings Plan:
Similar to the Education Savings Account, the 529 College Savings Plan is designed specifically for higher education expenses. These state-sponsored plans offer tax advantages, such as tax-free growth and withdrawals when used for qualified education expenses. Each state has its own 529 plan, and you’re free to choose any state’s plan, regardless of where you live. Research your options to find the plan that best suits your needs.

Having these six investment accounts in place will provide you with a comprehensive and diversified approach to achieving financial freedom. Each account serves a specific purpose, allowing you to save for retirement, fund major expenses, and even pass down wealth to future generations. Remember to consult a financial advisor to ensure these accounts align with your financial goals and risk tolerance, and start investing now to secure your financial future.