I’m a Banking Expert: How To Use Your Bank’s Retirement Accounts To Secure Your Future

For many of us, planning for retirement can be overwhelming and confusing. How much should you save? And how should you do it? And how much can you take out? And when? There are so many questions.

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But here’s a secret: Your local bank might just hold the key to securing your financial future. GOBankingRate spoke with financial experts to find out exactly how to get your bank to work for you and your retirement. Here’s how to use your bank’s retirement accounts to secure your future .

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The Lowdown on Bank Retirement Accounts

What exactly is a bank retirement account? Thomas J. Brock, CFA, CPA and expert contributor to RetireGuide , broke it down for us:

“Traditional bank retirement accounts provide for tax-deferred investment growth and upfront tax deductions, while Roth-style bank retirement accounts provide for tax-exempt investment growth.”

In plain English? You’ve got options. You can either kick the tax can down the road with a traditional account or bite the bullet now and enjoy tax-free withdrawals later with a Roth.

Now, here’s the catch — bank retirement accounts typically play it safer than their brokerage cousins. Brock put it this way:

“Investment options are more limited with bank retirement accounts than brokerage-based retirement accounts. The former offers low-risk products, such as certificates of deposits and savings accounts. The latter offers an array of investment options, including stocks, bonds, mutual funds and exchange-traded funds.”

So, while you might not be riding the stock market roller coaster, you’re also less likely to lose sleep over market swings.

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Making Your Bank’s Retirement Accounts Work Overtime

Here’s how you can make the most of those bank retirement accounts.

Embrace the Tax Perks

Erika Kullberg, a attorney and personal finance expert at Erika.com , can’t stress this enough:

“In my experience, one of the most effective ways to build for and improve your financial future is to take full advantage of retirement accounts, like IRAs or 401(k) plans. These accounts offer great tax advantages that can help your savings grow significantly over time, which can be a huge boost of confidence as you grow in your career.”

Think of it as the government giving you a pat on the back for saving. Who doesn’t love that?

Set It and Forget It

Andrew Latham, a CFP with SuperMoney.com , pointed out a game-changing perk.

“Banks can make retirement planning much simpler by allowing you to automate your savings and manage all your finances in one place,” he shared. “With your retirement accounts linked to your checking or savings, automating contributions becomes effortless, ensuring you stay on track with your savings goals without the hassle of managing multiple platforms.”

It’s basically like having a personal finance guru making the moves for you — you don’t even notice it happening.

Don’t Put All Your Eggs in One Basket

Even with limited options, you can still mix things up.

“Another great strategy is to diversify within your retirement accounts by investing and covering yourself with different asset types, including stocks, bonds, and mutual funds,” Kullberg said. “This can help you both reduce risk and maximize the growth of your investments.”

Think of it as creating a financial smoothie — a little bit of everything for a balanced blend.

Consider the Roth Route

Matt Willer, managing director of Capital Markets and partner at Phoenix Capital Group , said people should take advantage of Roth IRAs. He shared that like a CD, a Roth IRA will shelter the interest income from taxes.

To break it down: When you put money into a Roth IRA, it grows tax-free. This means that all the interest you earn over time isn’t taxed, and when you withdraw the money in retirement, you don’t have to pay taxes on it either. It’s a way to maximize your savings by keeping more of what you earn in the long run.

One-Stop Shop for Your Money

Some banks are stepping up their games.

“While not all banks offer the extensive investment options available through brokerages or independent advisors, the best banks have their own brokerage or investment advisory branches,” Latham said. “For example, Chase’s J.P. Morgan, Bank of America’s Merrill Lynch, and Wells Fargo Advisors combine the convenience of traditional banking with the sophisticated investment options typically found at dedicated brokerages.”

All your money is in one place, making it easier to manage today — and in the future.

Don’t Leave Money on the Table

You must be consistent about your contributions.

“Regular contributions to these accounts, especially with matching contributions from an employer, can provide a solid foundation to your retirement savings,” Kulberg said.

If your job offers a 401(k) match, make sure you’re taking advantage. It’s basically free money.

Stay Sharp and Ask For Help

While bank retirement accounts are great, they’re not the only game in town. Latham shared:

“That said, it’s hard to beat the low costs and large selection of products offered by major platforms like Vanguard and Fidelity, which remain popular choices for many investors.”

Don’t be shy about asking for help. A good financial advisor can be worth their weight in gold (or retirement savings).

The Final Word

Your bank’s retirement accounts can be your secret weapon for a comfy retirement. By making the most of tax perks, automating your savings, mixing up your investments and staying informed, you’re setting yourself up for a future where financial worries are a thing of the past. Remember, it’s not about getting rich quickly, it’s about building a solid foundation for your future, one deposit at a time. So why wait? Your future self will thank you for starting today.

This article originally appeared on GOBankingRates.com : I’m a Banking Expert: How To Use Your Bank’s Retirement Accounts To Secure Your Future