Pre-tax
- With a W-2 income, you don't have many options, but you can put pre-tax money into 401k, IRA, FSA and HSA (with HDHP).
- Middle-class also might have a business (no matter home business, LLC or other small business),which gives the flexibility to deduct expense from business income.
- If you have rental property, the rental related expense and cost can also be deductible.
After-tax, there are many ways to invest like stock, fund, bond, future etc, but here are some popular long-term ones:
- Property - own one or many rental properties to have income, and leverage estate tax exemption
- Life Insurance - Index life insurance is getting popular nowadays, usually needs to wait for 10 years to see the positive account cash value
- Annuity - low yield, but no fee or cost, retirement supplement (former employer 401k can be converted to annuity)
- 529 plan - for education cost, but no recommended
- Roth IRA - but have income limit
Own a house is a good option esp. in California with Prop. 19 Assessor introduced in year 2021.
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