Millennials are roughly between the ages of 27 and 42 this year. According to his 2022 survey from MagnifyMoney, 49% want to retire comfortably and 22% want to be rich when it comes to investment goals for this generation.
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The good news for millennials, especially the younger ones, is that time is still on their side. Millennials expect to retire at an average age of 61, according to Northwestern Mutual’s latest Planning and Progress survey. 34 years old.
To that end, here are six investments financial experts recommend for millennials in 2023.
“A mutual fund is an investment vehicle that pools money from many investors and uses it to purchase a diverse portfolio of stocks, bonds, or other securities,” said CFP, CFEI, BA, and MDL Financial. Group President Gabriel Lalonde said. “They could be a good choice for millennials who don’t have much money to invest or who want professional management of their investments.”
“Investing in mutual funds is a good choice for millennials for several reasons. One is that mutual funds allow investors to diversify their portfolios without having to buy individual stocks or bonds. Plus, mutual funds are often professionally managed, making them a good choice for investors who don’t have the time or expertise to manage their own investments.”
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Employer-sponsored retirement plans
“Employer-sponsored retirement plans, such as 401(k)s, are investment vehicles that allow employees to save and invest for their long-term retirement goals,” said Lalonde. . “Millennials should donate as much as they can if their employer offers her a 401(k) or similar retirement savings plan, especially if the employer offers commensurate contributions. .”
Participating in an employer-sponsored retirement plan is a good choice for millennials. Because you can save for the long term without thinking too much, and you may benefit from matching contributions by your employer.
“For long-term growth, millennials should either increase their contributions to a Roth IRA or start one if they don’t already have one,” said Bradley Rosen, owner and president of Longevity Financial. says.
“Individuals can contribute up to $6,500 annually to the Roth IRA. A Roth IRA account allows them to grow tax-free money and withdraw those funds for tax-free retirement. With high national debt and underfunded debt, it’s important to build as many non-taxable income streams as possible to alleviate future tax obligations, like Medicare and Social Security. Very likely.
cash value life insurance
“Individuals with an annual income of more than $153,000 or household incomes of more than $228,000 are not eligible for a Roth IRA,” Rosen said. Insurance should be considered as an alternative investment of sorts: Millennials are married and now have their first or second child, so the value of having insurance to protect their families is immense. Life insurance with cash value adds diversity to our portfolio while protecting against market losses and providing long-term growth opportunities.”
Rosen added, “Cash-value life insurance allows individuals to pass an estate to a spouse or children if the unthinkable happens. Even if you’re not dead, it’s doable.” A great investment option and a source of income for retirement.”
“Remember that not everything in life happens in retirement and not all investments require a 30- or 40-year horizon,” said Facet at CFP(r), ChFC(r). Wealth co-founder Brent Weiss said.
“Often we are not ready to commit to a multi-decade investment horizon, but we do not know exactly how the funds will be used. It could be a perfect time to take a more conservative approach.With interest rates rising and bond prices already falling, the right fixed income investments can offer excellent returns while balancing the risks of equity investments. may provide.”
real estate for rent
“The popularity of rental properties has skyrocketed since Airbnb was founded,” says Weiss. “Rental properties are a great way to generate tax-efficient income, but you need to do your homework, invest wisely, and understand the financial risks (and opportunities) associated with real estate. takes a lot of proactive planning, don’t expect to be an overnight success, it takes time to learn a rental game and turn it into a cash flow investment.”
Notes for Investing Millennials
“Be careful with alternative investments,” Weiss warned.
“Alternatives become popular when the stock market goes south. Public real estate, commodities, etc.) sound tempting but can be opaque.There is no shortage of people touting a better investment mousetrap.Know what you’re looking to buy or these investments Find a professional who can help you if you want to consider
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This article originally appeared on GOBankingRates.com: 6 Investments Millennials Should Make in 2023