invest Archives | Page 31 of 181

Jan

2025

Solo 401(k): The Retirement Plan Built for the Self-Employed

Navigating Solo 401(k) Plans: A Complete Guide for the Self-Employed

By Rebecca Lake | invest, Investing, Preparing for Retirement | Comments Off

Being self-employed offers many perks, including freedom and flexibility. What it doesn’t offer is an employer-sponsored retirement plan. But when you don’t have access to a 401(k) at work, opening a solo 401(k) can make it easier to stay on track with retirement planning.

Before you establish a solo 401(k) for yourself, it’s important to understand how these plans work and the pros and cons involved.

What Is a Solo 401(k)?

A solo 401(k) is a type of 401(k) that’s designed specifically with self-employed individuals in mind. This retirement savings option follows many of the same rules as workplace 401(k) plans in terms of annual contribution limits, tax treatment, and withdrawals. But it’s tailored to individuals who run a business solo or only employ their spouses.

It’s one of several self-employed retirement options you might consider when planning a long-term financial strategy.

Definition and Overview

A solo 401(k) is a tax-advantaged retirement account that’s for self-employed individuals and business owners who have zero employees, or no employees other than their spouse. This type of 401(k) plan is also known by a few other names:

• Solo-k

• Uni-k

• One-participant plan

Traditional solo 401(k) contributions are made using pre-tax dollars. However, it’s possible to open a Roth solo 401(k) instead. In the case of a Roth solo 401(k), you’d make contributions using after-tax dollars and be able to withdraw the money tax-free in retirement.

A self-employed 401(k) plan works much the same as a regular 401(k). For instance, you may be able to take loans from your savings if needed. Catch-up contributions are also allowed. The biggest difference is that there is no matching contribution from an outside employer.

You can start investing in a solo 401(k) for yourself through an online brokerage. There’s some paperwork you’ll need to fill out to get the process started, but once your account is open you can make contributions year-round.

At the end of the year, the IRS requires solo 401(k) plan owners to file a Form 5500-EZ if the account has $250,000 or more in assets.

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Contribution Limits in Solo 401(k) Plans

Much like workplace 401(k)s, there are annual contribution limits that apply to solo 401(k) plans.

The IRS caps total contributions to a solo 401(k) account at $69,000 for 2024 and $70,000 for 2025. That doesn’t include catch-up contributions for those age 50 and over.

As both the employee and employer of your own business, you can contribute both elective salary deferrals and employer nonelective contributions (you are both the employer and the employee in this scenario). Each has different contribution caps.

Annual Contribution Limits

As an employee, you can contribute up to 100% of your earned income up to the annual contribution limit: $23,000 in 2024 and $23,500 in 2025, plus an additional $7,500 for those age 50+ in elective salary deferrals. In 2025, those aged 60 to 63 may contribute an additional $11,250, instead of $7,500.

In addition, you can make employer nonelective contributions. These come directly from the “employer” (aka you) and are not deducted from the employee’s (your) salary. As an employer, you can contribute up to 25% of your self-employment income (business income – ½ self-employment tax and elective salary deferrals), in pre-tax dollars.

Setting Up a Solo 401(k) Plan

If you’re interested in setting up a solo 401(k) for yourself, you can do so through an online brokerage. Here’s a step-by-step guide for how to open a solo 401(k).

Steps to Establish Your Plan

1. Choose a Plan Administrator

A plan administrator is the person responsible for managing your solo 401(k). It’s their job to make sure the plan is meeting reporting and other requirements established by the IRS. If you’re self-employed, you can act as your own plan administrator or you could choose your accountant instead.

2. Choose a Brokerage

Once you know who’s going to manage the plan, the next step is deciding where to open it. A number of brokerages offer solo 401(k) plans so you may want to spend some time comparing things like:

• Account setup process

• Investment options

• Fees

You may be able to start the solo 401(k) account setup process online, though some brokerages require you to call and speak to a representative first. And you may need to finalize your account opening by mailing or faxing in any supporting documents the brokerage needs to complete the application.

3. Fill Out a Solo 401(k) Application

Before you can start a 401(k) account for yourself, you’ll need to give your brokerage some information about your business. A typical solo 401(k) application may ask for your:

• First and last name

• Employer Identification Number (EIN)

• Plan administrator’s name and contact information

• Social Security number

• Mailing address

• Citizenship status

• Income information

You’ll also need to disclose any professional associations or affiliations that might result in a conflict of interest with the brokerage. In completing the application, you’ll be asked to name one or more beneficiaries. You may also be asked to provide bank account information that will be used to make your initial contribution to the plan.

4. Choose Your Investments

Once you’ve returned your solo 401(k) account application and it’s been approved, you can choose your investments. The type of investments offered can depend on the brokerage and the plan. But typically, you may be able to choose from:

• Target-date funds

• Index funds

• Actively managed funds

• Exchange-traded funds (ETFs)

Whether you have access to individual stocks, bonds, CDs, or alternative investments such as commodities can depend on the platform that’s offering the plan.

5. Decide How Much to Contribute

You may choose to schedule automatic investments or make them manually according to a schedule that works for you.

Choosing Between Traditional and Roth Solo 401(k)s

You can opt for a traditional solo 401(k), which is made with pre-tax dollars, or a Roth solo 401(k), which is made with after-tax dollars. Which plan is better for you may depend on what you expect your income to be in retirement.

If you believe your income will be higher in retirement than it is now, in general, a Roth could be a better choice since you can take the distributions tax-free at that time. But if you think your income may be less in retirement than it is now, you might be better off with a traditional solo 401(k), which allows you to take the tax deduction now and have your distributions taxed in retirement.

Advantages and Disadvantages of Solo 401(k) Plans

When considering retirement account options, it can be helpful to look at the pros and cons to determine what works best for your personal situation.

Benefits of Having a Solo 401(k)

There are different reasons why opening a 401(k) for self employed individuals could make sense.

• Bigger contributions. Compared to other types of self-employed retirement plans, such as a SEP IRA or SIMPLE IRA, solo 401(k) contribution limits tend to be more generous. Neither a SEP IRA or SIMPLE IRA, for instance, allows for catch-up contributions.

• Roth contributions. You also have the option to open a Roth solo 401(k). If you anticipate being in a higher tax bracket when you retire, you may prefer being able to withdraw contributions tax-free with a Roth.

• Flexible withdrawal rules. A solo 401(k) can also offer more flexibility with regard to early withdrawals than a SEP IRA, SIMPLE IRA, traditional IRA, or Roth IRA. If your solo 401(k) plan allows it, you could take out a loan in place of an early withdrawal. This could help you to avoid early withdrawal penalties and taxes. An IRA-based plan wouldn’t allow for loans.

Considerations and Potential Drawbacks

There are also a few potential downsides of investing in a solo 401(k).

• Eligibility restrictions. If you run a small business and you have at least one employee other than a spouse, you won’t be able to open a solo 401(k) at all.

• Complicated reporting. Calculating contributions and filing can be more complicated with a solo 401(k) vs. a SEP IRA or SIMPLE IRA. If your plan has more than $250,000 in assets you’ll need to file Form 5500-EZ with the IRS each year.

• Administrative costs. Depending on where you open a solo 401(k) plan, the cost of maintaining it year to year may be higher compared to other self employed retirement plans. And an early 401(k) withdrawal can trigger taxes and penalties.

It’s important to consider the range of investment options offered through a solo 401(k). What you can invest in at one brokerage may be very different from another. The individual cost of those investments can also vary if some mutual funds or exchange-traded funds offered come with higher expense ratios than others.

💡 Quick Tip: Did you know that you must choose the investments in your IRA? Once you open a new IRA and start saving, you get to decide which mutual funds, ETFs, or other investments you want — it’s totally up to you.

Withdrawals and Loan Provisions

There are certain requirements for withdrawals and/or loans from a solo 401(k).

Rules for Withdrawing Funds

You can make withdrawals from a solo 401(k) without penalty at age 59 ½ or older. Distributions may be allowed before that time in the case of certain “triggering events,” such as a disability, but you may owe a 10% penalty as well as income taxes on the withdrawal.

Loan Options and Conditions

Some solo 401(k) plans may be set up to allow loans. If yours does, you could take out a loan in place of an early withdrawal. This could help you to avoid early withdrawal penalties and taxes. Just be sure to find out the loan terms and conditions, which can vary by plan.

Testing and Compliance for Solo 401(k)s

Unlike workplace 401(k)s, solo 401(k)s have no testing compliance requirements involved.

Alternatives to Solo 401(k) Plans

Instead of a solo 401(k), self employed individuals can consider another type of retirement account. Here’s how different options stack up.

Comparing a Solo 401(k) to a SEP IRA and Other Retirement Options

A SEP IRA is designed for small businesses. However, unlike a solo 401(k), a SEP IRA allows no catch-up contributions and there is no Roth version of the plan.

A SIMPLE IRA is for businesses with no more than 100 employees. It has much lower contribution limits than a solo 401(k) and once again, there is no Roth option.

Pros and Cons of a Solo 401(k)

A solo 401(k) has advantages and disadvantages. Here’s a side-by-side comparison of the benefits and drawbacks.

Solo 401(k) Pros	Solo 401(k) Cons
Catch-up contributions may allow older investors to save more for retirement versus a SEP IRA or SIMPLE IRA.	Only self-employed individuals who have no employees or just employee their spouses can contribute.
It’s possible to choose between a traditional solo 401(k) or Roth solo 401(k), based on your investing goals and tax situation.	Annual reporting requirements may be more complicated for a solo 401(k) compared to other self employed retirement plans.
Solo 401(k) plans may allow for loans, similar to workplace plans.	Early withdrawals from a solo 401(k) are subject to taxes and penalties.

The Takeaway

A solo 401(k) can be a worthwhile investment vehicle for self-employed people who want to save for retirement. It has more generous contribution limits than some other retirement options. In addition, there is a Roth version of the plan, and a solo 401(k) plan may also offer flexibility in terms of early withdrawals. For individuals who are self-employed, opening a solo 401(k) is one potential way to start saving for their golden years.

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Easily manage your retirement savings with a SoFi IRA.

FAQ

Can I contribute 100% of my salary to a solo 401(k)?

As an employee, you can contribute up to 100% of your earned income to a solo 401(k) up to the annual contribution limit, which is $23,000 in 2024, and $23,500 in 2025, plus an additional $7,500 for those age 50 and up in elective salary deferrals. For 2025, those aged 60 to 63 may contribute an additional $11,250, instead of $7,500.

Is a solo 401(k) taxable income?

You will pay taxes with a solo 401(k), but the type of plan you open determines when you’ll pay those taxes. If you have a traditional 401(k), your contributions are tax-deferred, and they reduce your taxable income for the year in which you make them. However, you will pay taxes on distributions when you take them in retirement. If you have a Roth 401(k), you pay taxes on your contributions when you make them, but your distributions in retirement are tax-free.

What is the average return on a solo 401(k)?

The return on a solo 401(k) depends on the investments in your portfolio. However, in general, a solo 401(k) invested in a mix of bonds, stocks, and cash assets can have an average rate of return ranging between 3% and 8%. But again, it depends on what your investments are, and how much you allocate to those different assets. You may want to compare your plan’s performance to plans with similar funds to get a general sense of what the average return might be.

Who qualifies for a solo 401(k)?

To be eligible for a solo 401(k), you must be self-employed or a small business owner with no employees other than a spouse. To open a solo 401(k) you will need an Employee Identification Number (EIN), which is available from the IRS.

Photo credit: iStock/visualspace

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

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Jan

2025

Investing in Rare Coins

By Samuel Becker | Growing Wealth, invest, Investing, Investment Strategy | Comments Off

Investing in rare coins involves buying and selling old, uncommon, scarce, historic, or otherwise notable coins in the hope that they will appreciate over time and can be sold for a profit.

Rare coins are a type of collectible, and as such are considered a type of alternative asset. Some alternative investments may offer potential returns or diversification (like most alternate assets, coin values don’t move in sync with traditional markets). But coins can be subject to fraud and forgery, as well as the whims of the market, and as such investing in coins is not without risk.

Key Points

• Rare coins are considered a type of collectible, similar to vintage cars and baseball cards.

• Investing in rare coins is a type of alternative investment. Alternatives are not correlated with traditional assets like stocks and bonds.

• Like many alternatives, investing in coins requires that investors do their due diligence to understand the value of each asset, and the potential upside as well as the risks.

• Certain types of coins can be subject to fraud and may be fake.

• Like many alts, the coin market can be volatile, and there’s no way to predict whether a certain rare coin will hold its value.

Understanding Rare Coin Investing

Rare coins are a type of collectible, meaning that investors might consider investing in rare coins as a form of alternative investments, which can also include other collectibles, such as vintage wines or antique books, or assets like commodities and real estate.

(Note that SoFi offers alternative investments including a number of different asset types, including real estate, commodities, private credit, hedge funds, and more. It does not offer rare coins, however.)

Alternative investments tend not to be correlated with traditional assets like stocks and bonds. Thus collecting and investing in coins can be a way to diversify your portfolio, but as with any new type of investment there can be a steep learning curve.

Prospective investors may not have a background in coin collecting or numismatics (a term that refers to the formal study of currency, but can apply to hobbyists), and thus may not know how to assess various types of currency.

While collectibles can have value, coins may not rank near the top of the list of the most valuable types of collectibles.

So, before investors get started in rare coin investing, it’s a good idea to learn the ins and outs of rare coins, and even dip into an alt investment guide to see where they stand in the greater ecosystem of alternative investments. At this time, SoFi does not offer rare coins or investment products focused on rare coins.

What Are Rare Coins?

Rare coins are what they sound like: Coins or currencies that are limited by mint location, nation of origin, year, condition, and other variables. Some collectible coins are unusually beautiful, or historically significant.

As an example, you could pick up a dime minted in 2023 in Philadelphia, which would be the opposite of a rare coin. In fact, more than 791 million dimes were minted in Philadelphia during 2023.

But if you were to stumble across a 1969 Lincoln penny minted in San Francisco which features a specific double-die error — that’s an extremely rare coin that might fetch as much as $25,000 at auction (assuming it was authentic).

Recommended: Why Invest in Alternative Assets?

A Brief History of Coin Collecting and Investing

People have been collecting and investing in coins, both common and rare, for thousands of years — perhaps for as long as there have been coins used as currency. In fact, Roman emperors were interested in coin collecting, as were the aristocracy during subsequent eras, and even some of the first U.S. presidents.

Owing to their design and relative rarity, the coins of antiquity were valued as something akin to works of art. But being small and portable, coins were easier to exchange and collect.

While collecting coins was reserved for those with the wealth to obtain exotic coins in the first place, coin collecting as a hobby became more widespread as coins became more common as a basic currency. For example, in the 17th and 18th centuries, when the study of coins and currency became more formalized, the growing base of knowledge also fueled collectors’ interest.

Then, as the minting process became more automated, and the use of various metal alloys made coin manufacturing cheaper in the 19th and 20th centuries, coin collecting continued to gain popularity. Trade shows and organizations emerged, and the first international convention for coin collectors was held in Detroit, in 1962.

Today, the advent of the internet has supported online forums for discussion and networking. In addition, alternative platforms for buying, selling and trading coins have emerged.

Sophisticated collectors may also become de facto investors hoping to see a profit from their collections. However, as with most types of alternative investments, especially collectibles, there are risks involved in coin collecting, owing to the rise of forgeries, fraud, and various scams. In addition, the market for a type of coin may wax and wane, taking a collector’s coin values with it.

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How to Get Started in Rare Coin Investing

For enterprising investors curious about rare coin investing, some initial research is paramount. That includes learning about the different types of rare coins, how to evaluate them, and more. But for someone who wanted to start a simple collection or portfolio of coins, they could always start with commonly used U.S. currency, which is relatively easy to verify and obtain. U.S. coins also have a long and storied history.

However, if you want to start adding rare or high-end coins to your portfolio, one way to do so is to consider buying coin sets. There are hundreds of such sets from all over the world, and from different time periods.

Once you start learning about the different types of coins that comprise sets, you should be able to build up your knowledge and pursue other rare coins. But again, this all depends on an investor’s resources and risk tolerance.

Rare coins are relatively high-risk investments, and there’s no guarantee that there’ll be a return when investors look to sell.

Types of Rare Coins

As discussed, there are many types of rare coins. As a collector or investor, you may want to narrow your focus to a specific subset of coins. Some examples:

• Ancient coins: Ancient coins date back hundreds or even thousands of years. They may be made from gold, silver, copper, or other metals. They may be sourced from ancient empires such as the Greeks or Romans, and since they’re quite rare, they tend to be valuable.

• Rare U.S. coins: The U.S. has minted a lot of coins over the past 250 years, and some are exceedingly rare, making them valuable. These coins may be valuable because they date from specific periods of U.S. history (e.g. the Civil War), have errors, or just have limited mintage.

• International coins: International coins, as a category, can include any coins sourced from around the world. These coins may be valuable due to low mintage, composition, or history, similar to U.S. coins.

• Error coins: Coins with mintage errors can also be valuable. Minting errors may vary, and include double dies (duplicate images), missing markings, strike errors (the design is off-center), and more.

• Bullion: Bullion coins are typically valuable for their composition, and don’t usually have an assigned dollar value. That is, a bullion coin might be one ounce of silver, and is valuable for its silver content. That said, bullion coins can also be minted or designed in rare or unusual ways, and some collectors may enjoy tracking them down as a way of investing in precious metals.

Evaluating Rare Coins

Evaluating rare coins can be difficult, and in many cases, it may be a good idea to take a rare coin to a numismatist or specialist. But in a general sense, investors can do some basic research and look into a coin’s history and origin, its design and features, and its weight and dimensions. There are numerous guides available for this exact purpose.

Would-be coin investors should also bear in mind that there are many fakes on the market. A coin may not actually be of its purported origin or metal composition (a “gold” coin may actually be gold-plated copper, for example). It may be incorrectly graded, too, and be in worse condition than it appears.

This is one of the reasons that investing in coins is rife with risk, and why it may be a good idea to speak with a specialist.

Buying and Selling Rare Coins

Buying and selling rare coins is fairly simple. There are coin and precious metal retail stores all over the world, and you can shop at those stores to find and select the rare coins you want.

There are also large and popular online retailers – an internet search will bring up many names — that you can use to make a purchase, or a sale.

The key, of course, is to try and make sure you’re not being taken advantage of or falling for a scam. So, read reviews, do some research on retailers, and frequent a dealer or retailer that you trust.

Market Trends and Price Factors

Forecasting or even wrapping your head around the market for rare coins can be difficult. But overall, it’s a nearly $10 billion market worldwide, one that’s expected to grow to nearly $20 billion by 2030. The market itself is often driven by passionate collectors and investors, and not economic or external forces like the stock market (though economic and geopolitical factors can have an effect, of course).

For example, the value of precious metals like gold and silver are often in flux. This would likely impact the value of certain coins. But other factors can come into play, like an archeological discovery or historical analysis that alters the perception of a powerful figure or era.

In other words, as with many types of assets it can be difficult to mark what, exactly, is going to increase or decrease the value of a specific coin, other than simple supply and demand. It’s a complex market, and one that will likely require some time and experience to get a handle on for investors.

Risks and Challenges

For investors, perhaps the biggest challenge or risk involved in investing in rare coins is that you may not know exactly what you’re looking at or investing in — especially if you’re inexperienced with coin collecting. You could pay too high of a premium on a coin, for instance, or misunderstand something related to mintage or strike errors. There are a lot of details you need to know, and it can be difficult to take everything into consideration.

Further, investors should be aware of the risks associated with generating returns. Coins don’t accrue value like stocks do, and it’s not easy to tell how much a coin can be worth. You also may need to find a buyer once you’re ready to sell — it’s not as liquid a market as the stock market.

Tax Implications of Rare Coin Investing

Since coins are a form of alternative investment — and collectibles, more specifically — a tax liability is generated once an investor sells it. If you realize a capital gain on that sale — that is, you sell it for more than you paid for it – then you owe capital gains tax, either short-term or long-term, depending on how long you owned it.

But because coins are collectible, a long-term capital gain from the sale of coins can be taxed as high as 28%, plus a potential 3.8% net investment income tax, depending on your adjusted gross income (AGI).

This is why it’s important to keep track of your purchases and sales, so that you can make an accurate tax record for the IRS. Note, too, that depending on where you live, you may not need to pay sales tax when you buy coins — that’s up to the states. As always, it may be best to consult with a tax professional if you have questions.

The Takeaway

Investing in rare coins can be a way to add alternative investments to your portfolio, but it’s an area that has risks. Investors will need to research what they’re buying and selling — which may require some experience in the market — and keep track of their investments to ensure they’re paying a proper amount in taxes.

Investing and collecting coins isn’t for everyone, but It may be a potentially fun and interesting way to add diversification to your portfolio.

Ready to expand your portfolio's growth potential? Alternative investments, traditionally available to high-net-worth individuals, are accessible to everyday investors on SoFi's easy-to-use platform. Investments in commodities, real estate, venture capital, and more are now within reach. Alternative investments can be high risk, so it's important to consider your portfolio goals and risk tolerance to determine if they're right for you.

Invest in alts to take your portfolio beyond stocks and bonds.

FAQ

What factors determine the value of a rare coin?

Several variables can determine a coin’s value, including its age, mintage, mint location, potential minting errors, the coin’s metal composition, as well as its beauty or historical rarity, and more.

How do you authenticate rare coins before investing?

To authenticate rare coins, it may be best to rely on the expertise of a professional numismatist. Otherwise, you’ll be doing a lot of research on your own to validate dates, origins, mintage, and more.

Is it better to invest in graded or ungraded rare coins?

It may be a good idea to invest in graded rare coins, so that you know what, exactly, you’re investing in.

Photo credit: iStock/Jitalia17

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INVESTMENTS ARE NOT FDIC INSURED • ARE NOT BANK GUARANTEED • MAY LOSE VALUE

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Neither the Investment Advisor Representatives of SoFi Wealth, nor the Registered Representatives of SoFi Securities are compensated for the sale of any product or service sold through any SoFi Invest platform.

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Alternative investments, including funds that invest in alternative investments, are risky and may not be suitable for all investors. Alternative investments often employ leveraging and other speculative practices that increase an investor's risk of loss to include complete loss of investment, often charge high fees, and can be highly illiquid and volatile. Alternative investments may lack diversification, involve complex tax structures and have delays in reporting important tax information. Registered and unregistered alternative investments are not subject to the same regulatory requirements as mutual funds.
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Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.

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Jan

2025

Understanding Special Needs Financial Planning

By Rebecca Lake | invest, Investing, Preparing for Retirement | Comments Off

Special needs financial planning is a subset of financial planning concerned with meeting the short and long-term needs of children and adults with disabilities. If you’re the primary caregiver for a child or another family member with special needs, it’s important to consider how they’ll be provided for during your lifetime and beyond.

Financial planning for special needs families requires a personalized approach, as every family’s situation is different. It’s never too late, or too early, to think about how to shape your family’s plan.

Key Points

• Personalized financial planning for those with special needs can help provide tailored support and quality of life.

• Government benefits like Medicaid, Supplemental Security Income (SSI), and Medicare are essential for covering care costs.

• ABLE accounts offer tax-advantaged savings for disability expenses without disrupting eligibility for federally funded benefits, such as SSI.

• Estate planning can include creating wills and trusts and appointing guardians to secure financial stability.

• A letter of intent guides future caregivers on daily routines and care needs.

The Importance of Special Needs Financial Planning

A financial plan is a roadmap to help you reach your financial goals, whether that means paying off your home early or retiring with $1 million in the bank. Accordingly, financial planning for special needs has some additional considerations. It also takes into account the financial demands of caring for someone with disabilities or special healthcare needs and what’s necessary to provide them with the best quality of life possible.

Developing a special needs financial plan is important for several reasons.

• Planning allows you to establish some continuity in the type of care your loved one receives while you’re living and after you’re gone.

• Government benefit programs may have specific requirements your loved one will need to meet to receive care. Setting up a disability trust account or another type of trust as part of your special needs financial plan can help ensure they’re eligible.

• While your focus may be on providing care for your loved one, you can’t afford to neglect your own goals, like retirement. A special needs financial plan helps you balance those goals against your loved one’s care priorities.

A comprehensive plan spans every stage of your loved one’s life and anticipates their needs at different ages. Financial planning for special needs adults, for instance, may look very different from financial planning for special needs infants, children, or teens. And planning ahead, and getting the planning process started at an early age means you don’t have to catch up later on.

Key Components of a Special Needs Financial Plan

What a special needs financial plan should cover depends largely on the specifics of your situation. At a minimum, you should probably be thinking about:

• Your immediate and long-term financial planning needs, including life insurance, disability insurance, and retirement savings

• Your loved one’s eligibility for government benefits that could help cover the cost of their care

• Whether you’ll need to create a transition plan that allows your loved one to live independently

• Long-term care planning for your loved one

• Estate planning and what you’d like to happen to your assets after you’re gone

It’s also important to think about who will help you execute your plan. That might include a financial advisor, accountant, and/or estate planning attorney. You’ll also need to decide who will act as guardian or power of attorney for your loved one in your absence if they’re unable to make decisions for themselves.

Long-Term Care Considerations

Special needs financial planning means thinking about the degree of care someone will need lifelong, the cost of that care, and how to pay for it. It’s important to consider your loved one’s needs and the options you have.

There are different ways to approach care, including:

• Taking care of your loved one yourself

• In-home care assistance, either on a part-time or full-time basis

• Day programs that provide care for special needs children or adults

• Group or community care homes

• Intermediate care facilities

• Independent living

Your loved one’s age and health care needs can dictate which type of care is most suited to their situation. Cost is an important consideration in each scenario.

Your health insurance may pay for some of your loved one’s needs if they’re eligible for enrollment in your plan. You may also apply for Medicaid on their behalf. Medicaid is a government-funded program administered at the state level that can cover a variety of costs related to special needs care, including:

• Preventive services

• Primary and specialty care

• Prescription drugs

• Medical devices

• Long-term care and support

Eligibility for Medicaid is automatic in most states when someone qualifies for Supplemental Security Income (SSI). SSI provides cash payments to children and adults with disabilities.
Medicare is also available to individuals under 65 with qualifying disabilities and can cover certain nursing care needs.

Independent of these programs, you may set up an ABLE account to help cover long-term care needs. The Achieving a Better Life Experience (ABLE) Act of 2014 created ABLE accounts which offer a tax-advantaged way to save money for qualified disability expenses.

You can open an ABLE account on behalf of a designated beneficiary and contribute up to the annual gift tax exclusion limit each year. Funds in an ABLE account can be used to pay for qualified disability expenses, including:

• Higher education

• Housing

• Transportation

• Job training and support

• Healthcare

• Personal support expenses

• Basic living expenses

• Legal expenses

• End-of-life care

• Burial and funeral expenses4

Someone can have an ABLE account and still be eligible to receive Medicaid, Medicare, or SSI to help pay for special needs care. If their ABLE account balance exceeds $100,000 that can affect their ability to continue drawing SSI benefits but it won’t impact their Medicaid or Medicare eligibility.

These are all issues that you might want to talk about with a financial advisor. They can go into detail with you about how to qualify for Medicaid in your state, how to plan ABLE account contributions, or whether it makes sense to establish a special needs trust for your loved one.

Retirement Planning With a Special Needs Child

While you may be focused on meeting your child’s needs, it’s important to consider where your retirement fits into your financial plan. Start by evaluating your assets, which may include:

• A 401(k) or similar workplace retirement plan

• A traditional or Roth IRA

• SEP IRAs or a solo 401(k) if you’re self-employed

• A taxable brokerage account

• A Health Savings Account (HSA) if you have a high deductible health plan

Look at how much you contribute to each account, what you’re paying in fees, and the returns your investments generate. Then, consider what age you’d like to retire and how much you think you’ll need.

Calculators can help with this step. You can use a 401(k) or an IRA calculator to estimate how much your money will grow, based on what you’re saving now.

Once you have a target savings number, ask yourself what you can do to increase your chances of reaching it. For instance, could you:

• Increase your 401(k) contribution rate

• Max out an IRA or HSA

• Change up your investment mix to seek better returns and/or reduce the fees you’re paying

• Supplement tax-advantaged retirement accounts with a taxable brokerage account

• Stash money in high-yield savings accounts or CDs for liquidity

What if you don’t have anything saved for retirement? You could open an IRA through an online brokerage and start contributions based on what your budget allows. For 2025, you can save up to $7,000 in an IRA or $8,000 if you’re 50 or older, the same as 2024.

Estate Planning for Special Needs Families

Special needs estate planning considers both your needs and your loved ones. What you’ll include in this plan can depend on whether you’re talking about estate planning for a special needs child or estate planning for special needs adults.

At a minimum, you’ll need a last will and testament. Your will allows you to specify how you want your assets to be distributed when you pass away but you can also use it to name one or more guardians for your special needs loved one. You may want to work with a special needs attorney to draft a will since the laws for creating one vary from state to state.

Another aspect of special needs estate planning centers on what will happen to your retirement accounts. When managing retirement accounts that allow you to name a beneficiary, it’s important to choose wisely.

Leaving your 401(k) or IRA directly to your child could impact the eligibility to receive certain government benefits. Aside from that, inherited IRAs are subject to required minimum distribution (RMD) rules, which could add another wrinkle to financial planning for special needs children.

Under these rules, non-spouse beneficiaries are required to withdraw all the money in the account within 10 years. The SECURE Act allows certain individuals with disabilities, or a special needs trust fund established on their behalf, to qualify as eligible designated beneficiaries. An eligible designated beneficiary may follow the 10-year withdrawal rule or take withdrawals over their life expectancy.

You’d have to determine whether your child qualifies as an eligible designated beneficiary and if so, whether it makes sense to name them as beneficiary to your retirement accounts directly or establish a special needs trust to inherit those accounts. If you prefer to establish a trust you could name it as the beneficiary to any life insurance policies you have as well.

Recommended: Why You Need a Trust

Creating a Letter of Intent

A letter of intent (LOI) includes a detailed profile of your special needs loved one, including their daily routine, care needs, and financial situation. This document is not legally binding; instead, it’s meant to act as a guide for those who will assume care duties after you’re gone.

Including a letter of intent in your special needs financial plan allows you to communicate what your loved one needs now and what their needs might be in the future. You can update your LOI annually to adjust for any changes to your situation.

There’s no specific template or form your letter of intent needs to take, however, it’s important to make it as detailed and thorough as possible. If you need direction on how to write a letter of intent you can find free templates to use as a guide online.

Working With Special Needs Financial Planners

If you find the idea of creating a financial plan for special needs overwhelming or you don’t know where to start, you may benefit from talking to a financial planner or advisor who specializes in this area. A special needs financial planner can look at your situation and help you create a financial plan that allows you to reach your goals while making sure your loved one is taken care of.

You may look for a financial planner or advisor who holds a chartered special needs consultant (ChSNC) designation. This credential means they’ve completed education courses in the area of special needs financial planning.

When choosing a financial advisor, consider:

• What experience they have with special needs planning

• What kind of clients they typically serve

• Which services they can help you with

• How much they charge

If you’d like to find a certified financial planner near you, you can use the CFP Board’s search tool to see who’s available in your area.

The Takeaway

Financial planning and estate planning for special needs are important priorities if you care for a child or adult with disabilities or significant medical issues. Creating your plan can take time, but you don’t have to go it alone. Take this financial planning quiz to find out how a financial advisor can help.

Ready to invest in your goals? It’s easy to get started when you open an investment account with SoFi Invest. You can invest in stocks, exchange-traded funds (ETFs), mutual funds, alternative funds, and more. SoFi doesn’t charge commissions, but other fees apply (full fee disclosure here).

For a limited time, opening and funding an Active Invest account gives you the opportunity to get up to $1,000 in the stock of your choice.

FAQ

How does special needs financial planning differ from traditional planning?

Traditional financial planning concerns itself with your goals, which may include college planning, paying off your mortgage, or retirement planning. Special needs financial planning can include those things but it also extends to creating a lifelong plan of care for a loved one with disabilities. The issues and challenges of financial planning for special needs tend to be more complex.

When should I start special needs financial planning?

The best time to start special needs financial planning is when you become the caregiver for someone with disabilities. Delaying planning could put the person you’re responsible for at risk of not getting the care they need if something should happen to you.

Can siblings be involved in special needs financial planning?

If you’re the parent of a child with special needs, involving siblings in financial planning often makes sense. You may designate them as the person you’d like to assume responsibility for their sibling’s care or financial assets after you’re gone. Making sure they’re involved in each stage of planning can make the transition as smooth as possible when the time comes.

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Jan

2025

ESG Score: Definition, Rating Agencies, How It’s Calculated

By Laurel Tincher | invest, Investing, Investment Strategy | Comments Off

Given the growth of environmental, social, and governance (ESG) strategies over the last 10 years, investors are increasingly interested in finding ways to evaluate companies based on their ESG scores. There is also concern about companies’ exposure to certain environmental, social, and governance risk factors.

As a result, several third-party scoring agencies have emerged to aggregate and analyze ESG data, and put it into a form investors can use.

The need for outside ESG scoring services stems from the fact that, for now, ESG guidelines are in flux. Some are voluntary, some are mandatory, and some companies have developed proprietary scoring systems to measure their performance, compliance, and risk mitigation in light of ESG standards.

In short, in most cases investors cannot turn to a single type of ESG score, but must become familiar with how different ESG scores work and how they’re applied.

Key Points

• Investors interested in ESG investing strategies need ESG scoring systems to evaluate companies.

• Investors are also aware of the ESG risk factors some businesses face and want evidence of risk mitigation.

• Because ESG standards vary, and companies adhere to different guidelines, hundreds of third-party scoring agencies have emerged.

• Most ESG scores are composite measures of how well a company is meeting certain standards.

• Investors need to know how a score is calculated in order to fully understand whether it’s assessing a company in a relevant way.

What Is an ESG Score?

An ESG score consists of aggregated measures of a company’s environmental, social, and governance data, as it pertains to that company’s operations, production, supply chain, workforce, corporate leadership, and more. These ESG metrics can include factors such as:

• Greenhouse gas emissions

• Renewable energy use

• Pollution mitigation

• Worker safety

• Fair labor practices

• Executive compensation

• Transparency in accounting and security

Although not a part of traditional financial metrics or fundamental analysis, these factors can have a significant impact on a company’s financial performance. If companies put out ESG reports on an annual basis, investors can see how they compare to competitors and whether or not they are making improvements over time to meet ESG goals and mitigate risks.

Currently, in the ESG investing sector there are challenges involved in adopting ESG standards and reporting models. ESG frameworks and metrics can vary by sector, company size, and geographic location. In addition, some are required while others are voluntary. Some proposed regulations have been met with legal challenges. More details on that below.

Examples of ESG Scoring Systems

There are three broad categories of ESG scoring methods.

• General. These ratings focus on a range of environmental, social, and governance factors.

• Issue-centric. Issue-focused ESG scores measure the performance of companies based on a single issue like renewable energy use, carbon emissions, or labor standards.

• Category-specific. Category-specific ESG scores drill down into one of the ESG pillars (environmental, social, or governance). For example, a ratings company might assess companies only along governance lines.

Recommended: What Is Socially Responsible Investing?

What Do ESG Scores Measure?

Just as there isn’t one set of ESG standards that all companies must adhere to, there are also different types of ESG scores. Each ESG score is meant to summarize information that investors and stakeholders committed to green investing can use for decision-making.

Some capture a company’s compliance to external (or proprietary) ESG rules. Some evaluate how much progress a company is making toward certain standards. Others may assess the risk levels a company faces from various environmental, social, and governance factors.

When taken pillar by pillar, ESG scores may include the following:

Environmental:

• Carbon emissions

• Climate change risks and planning

• Water use

• Biodiversity

• Land use

• Energy efficiency

• Toxic emissions & waste

• Packaging material & waste

• Electronic waste

Social:

• Labor management

• Worker safety

• Labor standards (e.g. diversity)

• Product safety & quality

• Consumer relations

• Community relations

Governance:

• Composition of the board

• Executive compensation

• Accounting practices and transparency

• Business ethics

• Corruption

• Cybersecurity

Other Factors to Consider

There can also be other factors within each of the three categories, which rating agencies may take into account when calculating an overall ESG score: e.g., sourcing of environmentally sustainable materials for product development, or addressing ESG risks in the supply chain can come into play.

Ideally, an ESG score helps to flesh out investors’ understanding of companies’ performance, risks, goals, and opportunities. Equally important for investors, an ESG score can provide a way to compare companies more accurately.

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Which Agencies Calculate ESG Scores?

Some 600 third-party agencies now conduct ESG data gathering, analysis, and scoring. As noted, some agencies specialize in a single ESG pillar, while others do all three.

Some of the most well-known rating agencies include Bloomberg ESG Data Services, Dow Jones Sustainability Index, MSCI ESG Research, Morningstar Sustainalytics, S&P Global, ISS ESG, Moody’s Investors Service, and Thomson Reuters ESG Research Data.

How Are ESG Scores Calculated?

These days, many companies are required to submit ESG disclosures along with their standard annual or quarterly reports. There are inconsistencies here as well — e.g., the SEC’s attempt to require certain types of ESG disclosures in 2024 was challenged in court, and is currently on hold.

But companies that comply with disclosure rules need to adopt reliable ESG frameworks that include specific standards and metrics. ESG frameworks help standardize the criteria employed in ESG disclosures, which serves stakeholders across the board. One of the most common is the Global Reporting Initiative (GRI), a set of voluntary standards that has nonetheless been adopted by 80% of large corporations.

Variations in ESG Scores

Every ESG scoring agency has its own methods for analyzing and reporting performance. Some agencies look at internal data such as voluntary disclosures and reporting, while others look at publicly available data.

Some agencies weigh ESG metrics based on their potential impact. For instance, worker safety may have a higher weight in an overall score because it poses significant financial and legal risks within a short-term time frame for that organization.

The ratings also take into account how the company compares to others in its industry. Some ratings agencies have different scoring frameworks for different industries, weighing factors based on their importance to that industry.

ESG Score Example

The MSCI ESG score is a widely used ESG rating system for thousands of equity and fixed-income companies worldwide. MSCI defines issues that are relevant to specific industries (e.g., carbon emissions may apply more to manufacturers than to banks), and looks at dozens of exposure metrics (which rate a company’s exposure to, say, biohazards or supply chain risks), as well as nearly 300 governance metrics.

Companies are then given a score from 0 to 10, with lower scores indicating that the company may not be mitigating that risk, and higher scores demonstrating a more proactive strategy around risk mitigation.

Those scores are then weighted according to complex, industry specific criteria. MSCI then translates the weighted scores into ratings that range from CCC to AAA.

What Is a Good ESG Score?

It’s important to understand the difference between ESG rating agencies and what metrics they focus on, since there isn’t a global standard for ESG scores. Investors can look at the ESG scores of different companies as part of their comparison prior to or after investing.

Some ESG scores range from 0-100, with 0 being the worst and 100 the best. Sometimes scores also have letter ratings between CCC and AAA.

Score ranges may be categorized as poor, average, good, or excellent. Companies may also be referred to as laggards, average, or leaders.

How Investors Can Use ESG Scores

Investors can look at ESG scores to compare companies they are interested in investing in or are already invested in. A high or rising ESG score may be a good indicator of lower ESG risk.

However, ESG scores shouldn’t be the only thing an investor looks at when making decisions about sustainable investing. There are not many regulations or standards around ESG reporting and ratings, and not all ESG data is of high quality. There can be issues with transparency and a lack of information about how data is collected and analyzed.

Key ways investors can use ESG scores are:

• As a supplement to traditional financial analysis.

• As a tool to evaluate potential risks and opportunities.

• To find companies that match one’s personal values.

• To evaluate improvements or performance decreases in existing investments.

The Takeaway

Looking at company ESG scores is a useful way to evaluate potential investments in addition to traditional financial metrics. Environmental, social, and governance scores can help identify potential risks as well as investment opportunities. As interest in sustainability continues to increase — as well as the concerns about how ESG risk factors may impact business performance — the accuracy, availability, and transparency of ESG scores is likely to keep improving.

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Jan

2025

The Ultimate Guide to Investing for Retirement at Age 60

By Michael Flannelly | Growing Wealth, invest, Investing | Comments Off

Retirement is a milestone that many people look forward to with great anticipation. While the freedom of having more time to spend with loved ones, pursue hobbies, or travel is certainly something to be celebrated, it is also important to plan, save, and invest so this future can be a reality.

It’s never too late to start saving and investing for these future goals, even if you’re nearing 60. And if you’ve been saving for years, it’s still smart to continue to invest for retirement when you reach 60. However, your investment strategies may need to change as you near the end of your working years. In this guide, we’ll explore key factors to consider when investing for retirement at age 60, as well as some low-risk investment options that may be suitable for those nearing retirement.

Investing for Retirement at 60

As you approach 60, retirement may be just around the corner. Maybe you’ve been saving for retirement your entire career. Or perhaps you started saving late and need to grow your nest egg quickly for your golden years. No matter the case, as retirement nears, you may wonder what to do to ensure financial stability.

Investing for retirement is critical to help you reach a comfortable financial position. But planning for retirement at age 60 may seem overwhelming. After all, there are several investment accounts you could open or continue to invest in, not to mention the various types of investments you could have in those accounts. With a little bit of research and planning, you can put yourself on the path of living comfortably in retirement.

If you’re beginning your investment journey, it’s better to start immediately rather than putting it off because you’re overwhelmed by the prospect of failing to meet your financial goals. It’s better to save and invest in different types of retirement plans now rather than put it off and have nothing down the road.

Options for Investing for Retirement at Age 60

Investing for retirement at age 60 can be a confusing and daunting process, particularly for those new to investing. But with some planning, retirees can find the best options for their needs. The following are some options to help you invest for retirement at age 60:

401(k)

A 401(k) is an employer-sponsored, tax-advantaged retirement savings plan that can be a valuable tool for someone who is 60 years old and looking to save for retirement. A 401(k) plan allows you to save for retirement on a tax-deferred basis, which means that your contributions could reduce your taxable income for the current year, and your investment earnings grow tax-free until you withdraw the funds in retirement.

If your employer offers a 401(k), it can be particularly advantageous for someone who is 60 years old as it provides several features that can help to maximize your retirement savings:

• Catch-up contributions: If you are 50 and over, you can make catch-up contributions to your 401(k) plan, which allows you to contribute more money to your account each year than younger participants. In 2024, the annual catch-up contribution is up to $7,500 more than the standard $23,000 contribution limit. In 2025, the annual catch-up contribution is up to $7,500 more than the standard $23,500 contribution limit. Also in 2025, those aged 60 to 63 may contribute an additional $11,250 (instead of $7,500), thanks to SECURE 2.0.

• Employer matching contributions: Many 401(k) plans offer employer matching contributions, which can help to boost your retirement savings. Maxing out your employer match can be an effective way of increasing savings.

• Several investment options: A 401(k) plan typically offers a range of investment options, including mutual funds, exchange-traded funds (ETFs), and individual stocks and bonds. These investment options allow you to diversify your portfolio and manage risk.

• Loan options: Some 401(k) plans allow you to borrow from your account, which can be helpful in times of financial need.

IRA

An individual retirement account (IRA) is a tax-advantaged investment account that provides a way to save for retirement outside of an employer-sponsored plan, such as a 401(k). An IRA can be an option for someone who is 60 years old and looking to save for retirement. There are two main types of IRAs: traditional and Roth.

For someone who is 60 years old, an IRA can offer a number of benefits in terms of retirement savings:

• Tax benefits: A traditional IRA provides tax-deferred growth on your contributions, meaning that you can deduct your contributions from your taxable income for the current year and pay taxes on the funds when you withdraw them in retirement. A Roth IRA provides tax-free growth on your contributions, meaning you can withdraw the funds in retirement without paying any taxes on the investment earnings.

• Catch-up contributions: Like a 401(k), you are eligible to make annual catch-up contributions to your IRA if you are 50 and over. For 2024, the annual catch-up contribution is $1,000 more than the standard $7,000 contribution limit. For 2025, as well, the annual catch-up contribution is $1,000 more than the standard $7,000 contribution limit.

Recommended: What is an IRA?

Real Estate

Investing in real estate is another option to save for retirement. Real estate investments provide a source of passive income, which may help supplement your retirement savings and hedge against inflation. There are several ways that someone who is 60 years old can invest in real estate, including:

• Rental property: Investing in rental property can provide a steady stream of rental income, which can help to supplement your retirement savings.

• Real estate investment trusts (REITs): Some REITs own and manage income-producing properties. Investing in REITs can provide exposure to a diverse portfolio of real estate assets without the responsibility of managing the properties yourself.

Annuities

Annuities may be an attractive investment vehicle for someone saving for retirement. An annuity is an investment product that provides a guaranteed income stream in exchange for a lump sum payment or a series of payments. It’s important to note that there are several types of annuities, each with unique features and benefits.

An annuity can offer many benefits for retirement savings:

• Guaranteed income: An annuity provides a guaranteed stream of income, which can help to provide financial stability in retirement.

• Protection from market downturns: Certain types of annuities can provide protection from market downturns, which can help to mitigate the impact of stock market losses on your retirement savings.

Things to Consider When Investing for Retirement at Age 60

Regardless of your financial situation, you can continue or start to invest for retirement at age 60. However, before you start investing at age 60, you should consider the following:

Retirement Goals

You want to figure out your desired lifestyle that you’ll have during retirement and how much money you will need to support it. You may want to travel the world. Or you want to live a low-key life near your family. Depending on your retirement goals, you’ll have much different needs.

Figuring out your retirement goals will help you determine how much you need to save and invest and what types of investments may be most suitable for your needs.

Time Horizon

One of the most important things to consider when investing for retirement at age 60 is your time horizon. With only a few years remaining until retirement, it’s important to consider how much time you have to invest and how long your investments need to last. This may affect the types of investments you choose, as you’ll likely want to focus on more conservative options that have a lower risk of losing your initial capital.

Risk Tolerance

Your risk tolerance may change as you get closer to retirement. At age 60, you may be less willing to take on the risk of losing your initial investment, as you’ll want to ensure that your savings last throughout your retirement. With a risk-averse outlook, you may consider lower-risk investment options such as certificates of deposit (CDs), dividend-paying stocks, or bond funds made up of US Treasuries and high-grade corporate debt.

Current Savings

Another critical factor to consider when investing for retirement at age 60 is your current savings. The amount you have already saved will play a significant role in determining how much you can invest and how much you will need to save. It’s also important to consider whether you have any other sources of retirement income, such as a pension plan or Social Security.

Social Security

Social Security is an important source of retirement income and can help supplement your other investments. When you turn 62, you can start receiving Social Security benefits. However, your benefits may be reduced if you start taking them early. Therefore, you want a holistic view of how your Social Security benefits will fit into your retirement plan.

Health Care Expenses

Healthcare expenses can significantly impact retirement savings, as they can be one of the largest expenses for individuals during their retirement years. Thus, you should factor in the potential for the need to pay for health care in your retirement savings plans.

According to the Fidelity Retiree Health Care Cost Estimate, the average 65-year-old couple retiring in 2022 can expect to spend approximately $315,000 on healthcare expenses throughout their retirement. This amount can quickly eat into an individual’s retirement savings, leaving them with less money for other costs such as housing, food, and entertainment.

Taxes

Some investment options have different tax implications, and it’s important to consider how your investments will be taxed in retirement. For example, traditional IRAs and 401(k)s are tax-deferred, meaning that you won’t have to pay taxes on the money you invest until you withdraw it in retirement. On the other hand, Roth IRAs and 401(k)s are taxed upfront, so you won’t have to pay taxes on the money you withdraw in retirement.

Cost of Living

Inflation, or the rise of the cost of living, can erode the value of your investments over time, so you want to factor in how inflation may affect your savings in the future. This can include investing in assets that may appreciate in value, such as stocks, or in assets that generate income, such as bonds and rental property.

Recommended: How Does Inflation Affect Retirement?

Open an Online IRA With SoFi

People may think that by the time they turn 60, they should have enough money to retire and live comfortably. However, like anything in life, things sometimes work out differently than you planned. So if you don’t have the retirement nest egg you envisioned by the time you turned 60, it doesn’t mean you should avoid saving altogether. By assessing your current financial situation, selecting appropriate investments, and taking advantage of retirement plans, you can ensure a secure financial future even if you’re starting at 60.

If you’re ready to start investing for retirement, you can open an online retirement account with SoFi. SoFi offers Traditional, Roth, and SEP IRAs for investors looking to reach their financial goals for retirement. With a SoFi Invest® active IRA, you’ll be able to access a broad range of investment options, like buying and selling stocks, exchange-traded funds (ETFs), and fractional shares with no commission.

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FAQ

Are you able to invest for retirement at 60?

It is possible to invest for retirement at age 60. However, it is also important to consider other factors, such as your current savings, retirement goals, and overall financial situation, to determine if investing for retirement at 60 is your best course of action.

Can you open a retirement account for investments at age 60?

You can open retirement accounts for investments at age 60. Several options are available, such as a traditional IRA or a Roth IRA. Additionally, these accounts allow catch-up contributions for people aged 50 or over.

How much money does the average 60-year-old invest for retirement?

The average amount a 60-year-old has saved for retirement can vary greatly depending on several factors, such as their current financial situation, savings habits, and overall financial goals. According to a report by Vanguard, the average and median retirement savings balance for individuals between the ages of 55 and 64 in 2021 was $256,244 and $89,716, respectively.

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Navigating Solo 401(k) Plans: A Complete Guide for the Self-Employed

What Is a Solo 401(k)?

Definition and Overview

Contribution Limits in Solo 401(k) Plans

Annual Contribution Limits

Setting Up a Solo 401(k) Plan

Steps to Establish Your Plan

Choosing Between Traditional and Roth Solo 401(k)s

Advantages and Disadvantages of Solo 401(k) Plans

Benefits of Having a Solo 401(k)

Considerations and Potential Drawbacks

Withdrawals and Loan Provisions

Rules for Withdrawing Funds

Loan Options and Conditions

Testing and Compliance for Solo 401(k)s

Alternatives to Solo 401(k) Plans

Comparing a Solo 401(k) to a SEP IRA and Other Retirement Options

Pros and Cons of a Solo 401(k)

The Takeaway

FAQ

Can I contribute 100% of my salary to a solo 401(k)?

Is a solo 401(k) taxable income?

What is the average return on a solo 401(k)?

Who qualifies for a solo 401(k)?

Investing in Rare Coins

Understanding Rare Coin Investing

What Are Rare Coins?

A Brief History of Coin Collecting and Investing

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How to Get Started in Rare Coin Investing

Types of Rare Coins

Evaluating Rare Coins

Buying and Selling Rare Coins

Market Trends and Price Factors

Risks and Challenges

Tax Implications of Rare Coin Investing

The Takeaway

FAQ

What factors determine the value of a rare coin?

How do you authenticate rare coins before investing?

Is it better to invest in graded or ungraded rare coins?

Understanding Special Needs Financial Planning

The Importance of Special Needs Financial Planning

Key Components of a Special Needs Financial Plan

Long-Term Care Considerations

Retirement Planning With a Special Needs Child

Estate Planning for Special Needs Families

Creating a Letter of Intent

Working With Special Needs Financial Planners

The Takeaway

FAQ

How does special needs financial planning differ from traditional planning?

When should I start special needs financial planning?

Can siblings be involved in special needs financial planning?

ESG Score: Definition, Rating Agencies, How It’s Calculated

What Is an ESG Score?

Examples of ESG Scoring Systems

What Do ESG Scores Measure?

Other Factors to Consider

Which Agencies Calculate ESG Scores?

How Are ESG Scores Calculated?

Variations in ESG Scores

ESG Score Example

What Is a Good ESG Score?

How Investors Can Use ESG Scores

The Takeaway

The Ultimate Guide to Investing for Retirement at Age 60

Investing for Retirement at 60

Options for Investing for Retirement at Age 60

401(k)

IRA

Real Estate

Annuities

Things to Consider When Investing for Retirement at Age 60

Retirement Goals

Time Horizon

Risk Tolerance

Current Savings

Social Security

Alternative investments,
now for the rest of us.

Student Loan
Refinancing

Personal
Loans

Online
Investments