Building up your retirement fund is a lot more sophisticated than just collecting coins in a big jar. And with gig-economy jobs representing more and more of today’s workforce, employer-matching 401(k) accounts are no longer something you can rely on. But with other options for saving money and building interest, you don’t need employer 401(k)s to ensure that you can retire with confidence. These different ways to save for retirement could help you build up the funds you need to enjoy your golden years. Although, if you have been saving those coins in a jar, don’t stop now—it’ll make for a nice conversation piece.
Alternative retirement saving begins with opening your self-directed IRA. This financial instrument offers creative investment opportunities beyond those of a traditional IRA, which are limited to more familiar investments, such as stocks and bonds. A self-directed IRA, on the other hand, can invest in promissory notes, precious metals, real estate, business ventures, and even the growing field of cryptocurrency. All investments come with risk, but the expansiveness of the self-directed IRA allows you to grow a diversified retirement portfolio.
One way to build for retirement that you may not have considered is to dip a toe into the lending business through investment in promissory notes. Your self-directed IRA can invest in these lending agreements and put the interest into your account. Most promissory notes are backed by collateral offerings, making them more secure, but not all of them are. While unsecured notes are riskier, no-collateral investments come with a higher interest rate.
Gold, silver, platinum, and palladium can play a part in your retirement savings. Either a self-directed IRA or a separate precious metals IRA can allow you to invest in these metals, which usually offer a comparatively low but very stable return on your investment. However, take note that investing in precious metals is very specific: collectible coins that do not meet standards for purity are ineligible even for self-directed IRAs.
Investment professionals have always extolled the virtues of real estate— as they say, land is the one thing no one is making any more of. You can make investment properties part of your portfolio with or without a self-directed IRA. While putting all your eggs in the real estate basket is a bad idea, rental properties are a great way to generate consistent revenue as part of your plan. Be aware before you invest, however, that proper and conscientious management is key to maintaining reputation and relationships in the real estate marketplace.
Use Your Imagination!
There are many other opportunities, as well, that go beyond stocks, bonds, and cash. With self-directed IRAs, while the sky isn’t the limit, you certainly have a lot more headroom. Brainstorm at home, then consult with an experienced financial advisor on some of the different ways to save for retirement. Putting together a portfolio that ranges from summer cottages to silver coins isn’t just fun—it’s smart.