401(k) is maxed out. No longer income eligible for IRA or Roth IRA. Any other retirement vehicles available?
Answers:
Thats great that you maxed out your 401(k). I don't know your age or your income, but it seems that you are making lots of money. If you below the age of 70 1/2, you can still open a Traditional IRA and contribute into it.
After that, you should look into variable annuities.
Never get life insurance and see it as a retirement vehicle. Life insurance only protects your family's income in case you die. You get nothing out of it when you die.
Investment Grade Life Insurance could be a possibility
So you are contributing $15,500 a year to your 401k ($20,500 if you are over 50)? These are the limits set by the government. Your employer may have an amount up to which they will match, but you are welcome to contribute more. For example your company may match you dollar for dollar up to 6% of your paycheck. You are welcome to contribute up to 25% of your paycheck to the 401k, your company however will only contribute the 6% of your paycheck.
You can still contribute to the 401k after these amounts, but the contribution is after taxes.
If you are self employed you can look into a SEP IRA.
Another option may be an annuity. If you have really contributed the $15,500 to your 401k this year I would suggest you go visit a financial consultant to discuss all your options.
There is always a taxable account to purchase mutual fund shares or stock in various companies. You could also purchase a cash value life insurance policy. You would not only be protecting your assets, you would be giving yourself additional potential retirement income through the cash value/inside build-up (i.e., loans, borrowing, etc).
The mutual funds and stock would be my first choice. You would be able to take advantage of the lower capital gains tax if you hold them long enough. The life insurance is a very individual decision. Term insurance would be good if you have no intention of using life insurance past a certain point. However, getting whole life would allow you to retain the same level of premium (albeit a bit higher than term in the earlier years) and you would get money back if you cancel it in the future. Term would just cancel and, sorry to sound morbid, if you don't die, you get nothing.
Ron, ChFC
Make sure you are maxing out the federal 401(k) limits and not just the company's matching limits. The federal limit is only for tax-deffered status, you can contribute more, but the additional contributions will not be tax-deductible.
Do not get insurance as an investment tool. The returns are horrible. The insurance company makes more money off the deal than you do.
Please understand that there is no such thing as investment grade life insurance. Per the federal government an agent can not say that life insurance is an investment. That being said, look into annuities or even tax free bonds(mutual funds).
Who set up your IRA's? Check with them.
You can purchase up to $30,000 per year in US Savings Bonds for tax advantaged gains.
You can purchase Tax Free Municipal Bonds for tax free gains.
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