The 401(k) plan is an excellent way for HENRYs, high earners not rich yet, to save for retirement. Hitting the maximum contribution limit is a goal many work toward to reap the benefits of this tax-deferred saving strategy fully. But what happens after you have maxed out your 401(k) contributions? What are your other options for saving for an independent and comfortable retirement? This article provides additional investment strategies for HENRYs seeking to elevate their retirement savings outside their 401(k) plan. Additional retirement savings strategies IRAs One of the most common options when you’ve maxed out your 401(k) is contributing to an Individual Retirement Account (IRA). An IRA offers similar tax benefits to 401(k), where your contributions grow tax-deferred. Roth IRA The Roth IRA differs significantly from traditional IRAs and employer-sponsored 401(k)s, which are funded with after-tax dollars. The benefit of a Roth IRA comes at retirement, as you are able to withdraw funds, both contributions and accumulation, without incurring additional taxes, which is beneficial if you anticipate being in a higher tax bracket upon retirement. To qualify for a Roth IRA, your income must fall within certain limits, which are adjusted annually. HENRYS must talk to a financial professional to determine if they can invest in a Roth IRA based on their income. Health Savings Account (HSA) An HSA is another great supplemental retirement saving strategy. These accounts are used with high-deductible health plans, giving individuals the advantage of triple tax benefits: tax-deductible contributions, tax-free growth, and tax-free withdrawals for qualified medical expenses. After age 65, non-medical withdrawals are taxed at the regular income tax rate, turning the HSA into a supplemental retirement income account. Taxable brokerage account Investing

An adequate emergency fund helps provide both security and flexibility   We’re living through interesting economic times. On the one hand, markets can be unpredictable and volatile. On the other hand, economic conditions are constantly changing. More than ever, people are asking: “How much money should I keep in cash?” Believe it or not, the answer is the same in turbulent times as it is in relatively calm periods. And it’s the same regardless of how “cautious” or “risky” your investment style might be. When it comes to how much you should keep in cash, you don’t want too much or too little — you want a “just right” amount based on your own budget and financial goals. The Importance of Cash in Your Portfolio Cash serves as the foundation of a solid financial plan. It can provide liquidity, safety, and confidence. Having cash on hand can help you manage everyday expenses, handle emergencies, and take advantage of investment opportunities without the need to sell off other assets. Finding the “Just Right” Amount Emergency Fund: Financial professionals typically recommend having three to six months’ worth of living expenses in an emergency fund. This ensures that you have enough to cover unexpected expenses like medical bills, car repairs, or temporary loss of income. If your job is less stable or you have dependents, consider aiming for six to twelve months’ worth of expenses. Short-Term Goals: If you have short-term financial goals, such as buying a house, taking a vacation, or making a large purchase within the next year or two, it’s wise to keep that money in cash. This way, you won’t have to worry about market fluctuations affecting your ability

529 College Savings plans are essential for saving for higher education expenses, and if used for education, accumulate tax-free. Since 529 plans came into existence in 1996, their popularity has continued to increase, with 529 plan assets crossing the $400 billion mark in 2021, according to Morningstar. 529 plans are qualified tuition plans that allow state and federal tax-free withdrawals of earnings and have the potential for tax deductions, which help offset the increasing cost of secondary education. 529 plans can be used in every state to pay for K-12 education expenses at private schools. Here is more about 529 plans you may want to know: There are two types of 529 plans- Pre-paid tuition plans- These 529 plans allow the account owner to purchase credits for later use at participating colleges or universities to pay for tuition. Education savings plans. The federal government guarantees education savings plans but not against loss due to the investment’s performance. Education savings plans utilize an investment account to save for the beneficiary’s future qualified higher education expenses, including room and board, fees, and qualified equipment expenses. 529 plans can now be used in every state to pay for K-12 education expenses at private schools. 529 plans can be a strategy to transfer wealth- Under the 2017 Tax Reform Act, an individual contributing to a 529 savings plan can frontload $75,000 (or five years’ worth of contributions) into one year without incurring federal gift taxes. A married couple who are parents, or grandparents, could contribute $150,000 into their grandchild’s 529 plan. It’s a unique way to transfer wealth for those who wish to make education a part of a legacy that provides a tax deduction and

Financial affluence often comes with various benefits and challenges, including the requirement for suitable insurance coverage. High-net-worth (HNW) families typically have a more complex risk profile than the average household, requiring a need for insurance to help preserve their wealth. HNW families tend to have various assets, each with its risk factors. These assets can range from luxury homes in different locations to yachts, private jets, fine art collections, jewelry, and vintage cars. A unique family requires unique insurance. HNW families may need additional coverage for increased liabilities and potential legal issues. Such realities make their insurance coverage requirements unique compared to most individuals’ insurance policies. Standard insurance products may not effectively address the elevated risk exposures. Homeowners and auto insurance considerations Conventional homeowners or auto insurance policies may fail to provide the appropriate level of coverage due to policy limits that do not match the value of the assets. For instance, a standard homeowner’s policy could limit certain valuables like art pieces or jewelry and, therefore, not fully cover these items in case of loss. Similarly, conventional auto insurance might need more coverage for high-end exotic vehicles. Personal liability coverage Another factor to consider is the global lifestyle often led by wealthy families. Assets and family members spread across multiple locations worldwide introduce an additional layer of risk that must be added to the coverage equation. More is needed to cover property and assets; personal liability coverage should also extend to account for incidents that may occur in diverse jurisdictions. Customized insurance solutions To mitigate these issues, HNW families need to consider tailored insurance coverage designed to address their unique needs. For example, an insurance plan that covers the

The average American worker will change jobs more than once in their lifetime. While there are multiple options such as leaving your 401(k) in your former plan if allowed, cashing out the account balance, or transferring the 401(k), many decide to roll over their old 401(k) to their new employer’s plan or other investment vehicles such as an IRA, Roth IRA, or an annuity. Here, we provide tips to help the rollover process go quickly and smoothly for you. 1.  Check with the 401(k) custodian or plan administrator to see if a rollover is possible. Considerations for a rollover include the time the account has been open and any fees associated with the outgoing transfer. If you’re still employed, and you want to move your 401(k) to another financial professional or custodian to manage, additional rules and fees may apply. 2. Request all transfer out paperwork from your HR department or the 401(k) custodian. Also, ask if other signatures or a ‘signature medallion stamp’ will be required on the paperwork to complete the transfer. Signature Medallion stamps guarantee the account. Your 401(k) custodian, plan administrator, or fund company accepting the transfer can provide the medallion stamp for you. 3. Include the latest 401(k) account statement with your transfer paperwork. This includes statements with your name, address, account number(s), and date within the last three to six months. 4. Realize you have options. You have a choice of where to transfer your 401(k)’s assets, the type of account, such as an IRA, Roth IRA, or annuity, and the type of investment strategies available to you in each investment vehicle. If allowed, you may also roll over your 401(k) to your new

It can be easy to lose focus on your own health needs, especially if you have other obligations. This can be an expensive mistake for several reasons. Consider these ways putting your health first can help you both physically and financially.   Outrun medical costs While finding the time to exercise can pose a challenge, it can reap big rewards in the long run. That’s because leading an active lifestyle may help you dodge health conditions like heart disease, high blood pressure, and cancer, each of which can come with pricey medical expenses, such as for prescriptions and doctor visits. By staying healthy and avoiding these costs, you may have more money to contribute to long-term financial goals, such as saving for retirement or paying off your mortgage. Reduce food bills Preparing healthy meals for yourself may require careful planning, but you might find it’s worth the effort. Americans spent about $2,375 on restaurant and takeout food in 2022. Since food made at home is generally cheaper, you could save by preparing your own healthy meals. Then you could possibly put some money toward time away at a spa or other restful location. Pay less for transportation You can spend less on maintaining your car or for bus, cab, or train fare if you walk or bicycle instead when possible. Plus, you’ll enjoy numerous health benefits that can possibly stave off expensive medical care. The additional exercise can strengthen your lungs, muscles, and joints. You might also be able to enjoy the many benefits sunshine can provide, such as improving your levels of vitamin D, which can help regulate your blood pressure and blood sugar levels. Maintain your weight Weight

A critical part of financial planning that is often overlooked is insurance. Having various insurance policies will provide different benefits to your financial plan, ranging from protection to tax breaks. In fact, insurance is a component of most financial plans, and some financial professionals are licensed to sell it themselves. Read on to learn more about the role insurance plays in financial planning and what policies you might consider. Risk Coverage All insurance policies are designed to mitigate risks. They help offset the potential financial loss you may experience due to a foreseen event. From death to hospitalization to a house damaged in an earthquake, insurance will help to absorb some of the financial burdens.1 Tax Benefits Insurance policies also provide tax benefits for the holder as well. Money paid toward life insurance premiums will be able to be deducted under Section 80C of the tax code. The premiums you pay for your health insurance may also be deducted from Section 80D of the tax law. Additionally, any death benefit from a life insurance policy will be tax-free, so your loved ones won’t be saddled with an additional tax burden.2 Insurance Policies You Should Have in Your Portfolio While there are insurance plans to cover everything from your jewelry to your long-term care, there are a few types of policies that you will want to have in your financial portfolio. Life Insurance: A term life insurance policy will provide a death benefit in the event of premature death. These policies are crucial to your financial planning as they will provide needed funds should the family’s provider pass away and the family faces a significant financial loss. Home Insurance: One of

Whether you are expecting your first child or have been a parent for years, finances and building a future for your family go hand-in-hand. Luckily, there are money moves you can make now to help manage financial stress, support yourself and your loved ones, and help your children as they get older. Here are three key financial moves all parents should consider making. Review and Update Your Life Insurance For many, life insurance is a necessary but unmanaged expense for a good reason. It is not pleasant to consider a situation where your life insurance policy may become relevant to your loved ones. However, for parents, in particular, having adequate life insurance might be the difference between your children struggling or enjoying a comfortable future. Many employers offer life insurance to their employees, often at a specific multiplier of their salary. For some families, this amount may be adequate; but in other cases, you may need to purchase an additional term policy that provides coverage until your youngest child is an adult. It is worth reviewing how much coverage you have, then comparing this with your average projected earnings over the next decade or so. Also, update your beneficiaries after any major changes. A divorce decree does not remove an ex-spouse’s name from a life insurance policy. For any changes in your marital status or if a named beneficiary passes away, you must update your list of beneficiaries with your insurer. Consider a College Savings Account As anyone who is still paying their student loans could confirm, college costs may be a major expense. For many, student loans are second only to the cost of a home purchase. Fortunately, time

There is one thing that we will most likely all do one day: regardless of your status in society, position at work, or whether you are tall or short, you may pass down assets to loved ones. When that day arrives, an estate plan is essential for managing and distributing those assets without too many hiccups. Physical real estate is one of the more valuable items on your asset list. It is critical that you are knowledgeable of how the process works in your state and how to design an estate plan that can suit your wishes.   Ownership How the property was owned can be the determining factor in what happens to it during the distribution phase of your assets. Depending on your estate plan, the home or the amount of equity you have in a home can transfer to heirs, beneficiaries, or surviving owners unless otherwise specified. There are several ways to purchase real estate. Understanding these types of ownership and how they could impact you and your beneficiaries is crucial.   Sole ownership Sole ownership is the possession by an entity or individual who is legally eligible to hold the title. Typically, sole ownership is held by single people, or married individuals who hold property apart from their spouse. Pros It is easier to complete transactions as no one needs to authorize the process. You control what happens to your property. Cons The transferring of ownership from one owner to another is not a simple process especially if the owner didn’t have a will. Your heirs will probably have to probate your estate to transfer the title. Community property This is a type of ownership by spouses

A common piece of standard life insurance advice is to get it as early as possible — and there are good reasons why. If you’re young and in relatively good health, purchasing a term life insurance policy is usually much cheaper than it will be a decade or two later. But while it can seem counterintuitive, there are actually several surprising benefits to getting life insurance later in life. Continue reading to learn more about what you can expect if you purchase life insurance in your 50s, 60s, or beyond. Coverage for Final Expenses Many people who buy life insurance in their 20s or 30s consider income replacement. If you have a spouse or minor children at home, it can be critical to leave enough in life insurance proceeds to help cover lost income or pay your children’s college expenses. But once your children leave the house, you no longer need an enormous life insurance policy. Instead, you may want to focus on covering more specific costs, like funeral expenses, medical bills, or the cost of settling your estate. This life insurance can help you plan (and pay for) exactly what you want without placing any financial burden on your loved ones. Supplemental Retirement Income Term life insurance covers a certain term of years and pays out only if you pass away during this period. But other types of life insurance, like whole life or permanent life insurance, will accumulate cash value over time. If you purchase these policies later in life, you can use this cash value as an extra source of retirement income—whether via a policy loan or a withdrawal. Estate and Legacy Planning Tools Life insurance can