What Should You Do With An Extra $1,000 (Besides Spend It)
By Judith Ohikuare
If you want to look beyond employer-sponsored plans like 401(k)s and 403(b)s, Celaya suggests contributing to a traditional or Roth IRA.
“Depending on your specific situation, the tax advantages associated with each IRA type can mean a significant increase in your real return, after-tax, overtime,” she explains. “Traditional IRAs can potentially lower your tax bill today, while Roth IRAs provide the opportunity for significant tax-free growth overtime.”
Try using Betterment’s comparison calculator to decide which accounts (or combination of them) might be best for you.