saving and growing money

Open Ended

What are some different ways in which we can save and grow money? Watermelon eaters.

Growing and saving money

By Diego Guerrero

Savings Accounts (Banks & Credit Unions)

•Very low risk (FDIC/NCUA insured)

–Easy access to money

–Best for emergencies and short-term goals
- Low interest rate compared to a High-Yield savings

Banks are the most common example of a savings account

High-Yield Savings & CDs

•Low risk, better interest than regular savings

–CDs lock money for a set time

–Good for short- to medium-term goals

Multiple Choice

What's the difference between a regular savings account and a high-yield savings account?

• A regular savings account has no fees, while a high-yield savings account charges monthly fees.
• A regular savings account is only available at credit unions, whereas high-yield accounts are at banks.
• A regular savings account allows unlimited withdrawals, while a high-yield account limits them.
• A regular savings account has a lower interest rate compared to a high-yield savings account, which offers a higher interest rate.

401(k) & IRA Retirement Accounts

•Designed for long-term retirement savings

–Tax advantages help money grow faster

–Employer matching = free money (401k)

Traditional 401K

• Contributions are made pre-tax, which lowers your current taxable income. The investments grow tax-deferred, and you pay ordinary income tax on withdrawals in retirement. This is beneficial if you expect to be in a lower tax bracket in retirement than you are now

  .

Roth 401k

Contributions are made with after-tax dollars, so there's no upfront tax deduction. However, qualified withdrawals of contributions and earnings in retirement are entirely tax-free. This is advantageous if you expect to be in the same or a higher tax bracket in retirement.

Open Ended

Which 401k would you prefer? turn and talk and twerk

Investments (Stocks, ETFs, Mutual Funds)

•Higher potential growth

–More ups and downs (risk)

–Best for long-term investing