Are you saving too much for retirement?
Do you find yourself saving too much for retirement and unsure what to do with that money? Consider creating an opportunity fund and moving that excess money there. This fund acts as a dedicated brokerage account where you can invest your surplus cash in low-cost index funds. By doing so, you can grow your money without it affecting your retirement savings plans. It’s important to keep your investments focused and efficient, which is why investing in large cap ETFs, such as the S&P 500, is recommended. These ETFs offer broad market exposure with typically lower fees, making them a tax-efficient choice for long-term growth.
Strategic Investment Choices: Focus on Core Asset Classes
Rather than spreading your investments too thin or considering less optimal options like annuities or whole life insurance, concentrate on big core asset classes. Aim to keep your portfolio costs below the 0.1% mark, ensuring that more of your money is working for you. Remember, diversification doesn’t mean investing in every possible option; it means making smart, strategic choices that align with your financial goals.
Tax Efficiency and Flexibility with Withdrawals
If you need to withdraw from your opportunity fund, the tax implications are relatively favorable. You’ll only pay capital gains tax on the profit made from your investments, not on the entire withdrawal amount. This makes the opportunity fund a flexible and efficient way to handle excess savings, providing both growth potential and liquidity.
Casey Smith
President, Wiser Wealth Management
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