Invest Your Non-Retirement Funds – The Essential Rules That Work for You

The moment you are done with the conventional retirement funds, chances are you will be looking at all that is left for you! If you ask an investment advisor, they will always suggest you make use of non-retirement funds, such as the after-tax money, mutual funds, and ETFs, along with conventional retirement funds.


The reasons for this are simple:

  • There are no contribution restrictions
  • There are zero penalties for taking out the cash before you are 60
  • You have the scope for significant investment growth

There are several scopes to maximize savings using non-retirement funds. Having said that, you should also look at some of the standard pitfalls that you can avert. To know more about this, you can check out Harding Financial Group.

However, when it comes to investing the non-retirement funds, the following rules can prove to be golden:

  1. Ensure that you are obtaining the retirement fund benefits

The first rule is to max out every retirement fund before starting the same. It is necessary to take full advantage of the 401k benefits. In case there is a match with the company, you have free money. All you have to do is max out any cash which you invest in the 401K to leverage the company match. That aside, your IRA will become completely tax-free till such time you leave it. You would want to take advantage of all of the benefits.

  1. Consider life insurance as your investment

It makes sense to look at life insurance as an investment. When there are kids who stay at home and have a huge mortgage on the house, there is a need for life insurance. Several people are skeptical about life insurance and want to avoid working toward any plan. And as you remind yourself that the life insurance is an investment for you, the payment becomes much easier.

  1. You need to hold the investments for over a year

As you invest right after the correct tax funds, you will get the tax benefit as a capital gains tax. And when you purchase the stock and then hold it for more than a year, chances are you will get the capital gains rates. However, if you sell it the next day, chances are that the income would be within the standard tax rate. It could mean that there is a difference of several dollars.

Finally, you have to consider the capital loss as the bank. The ETF or the stock that you purchase goes down, and you need to sell it. After that, you will have the ample experience loss. And with that loss, you can write off almost $3,000 annually on the tax return as a loss. Therefore, depending on the loss, you will have to find ways for writing on the tax return. But if you have one more stock which is appreciated to a huge extent, chances are that you can sell it and use the capital loss to offset the gain. After that, you are able to rebuyrebuy the highly appreciated stock and increase the basis. You will come across a few washes sale rules you can check out for in this situation, for instance, waiting for close to 30 days to rebuy the stock.

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