Here’s some options for investing based on different individual and household possibilities.
If you have no retirement account.
For most people with earned income, regardless of age, income or net worth; contributing some amount to a retirement account may be a good option. Individual retirement accounts can be opened by anyone, and may be a good option for those without a workplace sponsored retirement account, or those who wish to invest in an individual account outside of a work plan.
If you have a retirement account at work.
Because investment product selections can be limited in employer-sponsored plans such as 401(k)s and 403)b)s, financial advisors commonly recommend contributing to employer accounts only if the employer offers a match, or if the contribution limits of an individual IRA are lower than the amount you want to invest. Contributing up to the amount that is matched in a work account, and then investing any remaining retirement contributions in an individual account may be a good option for some.
If you have a pension at work.
For those who have a pension at work, advisors commonly recommend contributing to a retirement investment account in addition to paycheck deductions made to a pension plan. Using the commonly recommended contribution amount of 15% of income, if 10% of your income is deducted to fund a pension, you may want to contribute an additional 5% or more of your income to a retirement account.
If you have debt.
Having debt and making investments are both financial activities that involve risk. Having exposure to both debt and investment risks at the same time can be an excessive amount of financial risk for many individuals and households. However, if it will take you a while to reduce debt to a desired level, it may be a good option to begin investing at least something now to get in the habit and to allow annual compounding to start working for you.
The financial profile of an individual or household can influence what investment option(s) may be best suited. Aesop Advisor LLC can make investment options recommendations after reviewing a client's information.