How should I invest outside of my company’s retirement plan(s)?

If you have maxed-out the annual savings limits of your company retirement plan(s), and still need to save more towards retirement, it is generally advisable to save and invest additional money outside of your retirement plan, and to do so similarly to how you invest within your retirement plan, if you are using a wise life stage approach (see the Financial Independence video, the WealthStep Investment Advice module and other FAQ’s). One option to consider is WealthStep’s “WealthStep Direct” service, designed to make that process easy for you. If you don’t currently meet WealthStep Direct’s minimums (see FAQ), or you applied for the WealthStep Direct minimum waiver and WealthStep is unable to approve your waiver application currently, WealthStep encourages you to utilize a low-cost, highly-diversified, pre-built portfolio, such as Target Date Funds (TDF’s) or Target Allocation funds (TAF’s) by Vanguard (directly through Vanguard.com, or through the low-cost brokerage firm of your choosing, if those funds are available). For taxable accounts, TDF’s and TAF’s can have flexibility drawbacks, for example when it is time to adjust your overall asset allocation, you might need to sell the entire fund, which could lead to capital gains taxes). A simple alternative could be to use a Vanguard (or other) low-cost global stock fund, combined with a global or US broad market bond fund, and hold them in proportions that match your asset allocation strategy’s needs, and then allocation adjustments would only require partial, rather than complete, sales of the mutual funds or ETF’s, thereby reducing potential capital gains costs in taxable accounts. However, such an approach requires that you monitor and rebalance your account yourself, whereas TDF’s and TAF’s are rebalanced automatically for you (as are WealthStep portfolios). In all cases, consider using WealthStep.com advice to help you determine a reasonably appropriate investment allocation for your life stage, and savings goals. WealthStep has no financial relationship with and does not receive any incentives or compensation from Vanguard or any other financial institution.