What are the benefits of building a brokerage account? Most people invest in retirement plans for their tax advantage status but what about a taxable investment account? Here are 3 reasons to build a non-retirement investment account.
1. First benefit is obvious; you can access the money before retirement! For most retirement accounts you are penalized for pulling out funds early but that does not apply for non-retirement accounts. So, if you have goals for funds that you would like access to before age 59 ½, this could be a fit.
2. Access to greater returns than just high yield savings accounts. This is a favorite strategy of mine! Think about the emergency fund interest earned in a high yield savings account. This can generate a good amount of interest income by the end of the year which is great. But if you have additional funds that you can save for goals you would like to pursue maybe 3-7 years from now, you can start putting those funds in an investment vehicle that has a potential higher return than a savings account.
3. Eventually you earn enough to significantly supplement your budget. Imagine eventually building a non-retirement account up to $50,000 that hypothetically earns a 10% return. Your family just generated $5,000 to use as needed! This could be your vacation budget, help purchase your next car, fund home improvement projects, or you utilize these funds for more complex financial strategies. The possibilities are endless for how this can support your overall goals!
The benefits of building a non-retirement account are HUGE! But it isn’t a strategy that every household is ready for. There is foundational work that needs to be tackled first. If you would like to discuss specifics for your financial situation, please reach out to me directly. I would love to have the discussion!
Thrivent and its financial advisors and professionals do not provide legal, accounting, or tax advice. Consult your attorney or tax professional. See thrivent.com/social for important disclosures.
