IRA’s and 401k’s are two very common ways to put money away for retirement. When you put money into these two vehicles it is put away pre-tax. You don’t have to include the money you put into these accounts when figuring out your taxable income. The money you place in these funds will then be invested in stocks and mutual fund. Hopefully, by investing in these underlying investments your retirement account will continue to grow tax free. You will have to pay taxes on the money when you use it during retirement. For a full description of how this works, talk with your accountant or investment professional.
Investing directly in stocks and mutual funds. This is one of the most common ways of getting more savings for your retirement. Many people think that investing in the stock market is like gambling and that it is very risky. The truth is, if you are willing to take some time to learn a little bit about the process (no one is expecting you to become an expert, just know enough to ask questions and be informed) you will greatly eliminate much of the risk. Risk comes from making poor choices and making poor choices usually comes from lack of knowledge and just following along and taking advice from someone who often knows little more than you do. Mutual funds are professionally manged and you can find various funds to invest in. Again, knowledge is power. Even if you work with a financial consultant, having some knowledge of how your money is being invested is just a smart thing to do… after all, it is your money. No one is going to care about your money as much as you do!
Real estate. Again, many people will think investing in real estate is risky, but if you know what you are doing you will greatly reduce the risk. There are a few ways to invest in real estate one of the most common is to buy rental properties and rent them out. This provides you with an ongoing cash flow. That cash flow than can be invested in still other ways to ensure it’s continual growth. I personally feel it is a mistake to just turn your money over to some “professional” and hope for the best. I think it makes more sense to learn a few basic skills so you can be a partner in all wealth creation strategies. This is the best way to ensure your money grows the way you want it to.