How do I know which of my investments are better off in my IRA, Roth IRA or brokerage account? -Peter It’s great that you’re considering this – many people overlook the importance of where to hold different investments. Often, this is due to a lack of awareness about how significantly it can impact overall returns. A financial advisor can help you decide how and where to invest your retirement savings. Connect with a fiduciary advisor. Tax treatment is the most important consideration when deciding wher ...

Group 1 - Many financial firms offer both brokerage and investment advisory services, allowing clients to choose between a brokerage account, an advisory account, or both [1] - Understanding the differences in services and fees is crucial when opening or converting accounts to align with financial goals [2] - Brokerage accounts involve transaction-based fees, making them potentially more cost-effective for infrequent traders or long-term investors [3] Group 2 - Advisory accounts charge fees based on a percentage of total assets held, typically on a periodic basis, regardless of trading activity [4] - The choice between brokerage and advisory accounts depends on trading frequency and the desire for ongoing investment advice [4] - The specific services and fees depend on the agreement signed with the brokerage firm or investment advisor, and clients should clarify the capacity in which financial professionals are acting [5]

Core Viewpoint - The focus of retirement planning should shift from net worth to savings, as net worth does not accurately reflect spendable cash for retirement [1][6]. Summary by Sections Understanding Net Worth - Net worth is calculated as total assets minus total debts, which may not represent liquid funds available for retirement [3][6]. - For example, a person with $1 million in assets and $200,000 in mortgage debt has a net worth of $800,000 [3]. Limitations of Net Worth - Not all assets are easily convertible to cash; for instance, home equity cannot be accessed without selling the home or borrowing against it [4]. - Accounts such as IRAs, 401(k)s, and brokerage accounts are more relevant for retirement funding as they can be liquidated or provide income through dividends [5][8]. Importance of Savings - Savings accounts and retirement accounts are crucial for determining retirement readiness, as they represent money that can be used to cover expenses [8]. - The value of a home can fluctuate, impacting net worth; for example, a home valued at $500,000 with a $200,000 mortgage results in a net worth of $800,000, but if the home value drops to $400,000, net worth decreases to $700,000 [9][10].

Investment Vehicles - 401(k) or Employer-Sponsored Retirement Plan is crucial for retirement savings, offering tax-deferred growth and potential employer matching contributions, which can be considered free money for retirement [3] - Roth IRA allows for tax-free growth and withdrawals in retirement, making it a suitable option for individuals expecting to be in a higher tax bracket later in life [4] - A taxable Brokerage Account provides flexibility for investing without the restrictions of retirement accounts, allowing access to funds anytime, although capital gains taxes will apply on profits [5] - Pensions, while less common today, offer a guaranteed source of retirement income, reducing reliance on personal savings, particularly in specific sectors like government or union jobs [6] Expert Recommendations - Financial experts recommend starting with the right investments to grow wealth, emphasizing the importance of diversifying investment options [2] - Maximizing contributions to retirement accounts, especially to capture full employer matches, is highlighted as a priority for individuals [3] - The significance of knowing one's net worth is also underscored by financial experts, as it aids in making informed investment decisions [4]