I Have Savings and Retirement Accounts. Now What?

Our editor-in-chief 'makes cents' of building wealth

Illustration of dollar bills and change

The Balance/Alice Morgan

Dear Kristin,

I am in a place right now where I have some good money flow and am trying to figure out where to put it next. I have a good savings account/emergency fund, I am on track to max out my Roth IRA, and I am wondering what to do next. Do you have recommendations on where to get started when it comes to investing money?



Dear Anon,

I’m really happy you asked this question because what you’re really asking is how to build wealth, now that you’ve started to put money aside for savings and retirement. And this is a wonderful thing because I think most people just try to tuck money aside for their later years instead of increasing their wealth now. But first, I want to make sure you are actually putting away enough for your retirement.

You mentioned you have a Roth IRA—is that the only retirement account that you have? If it is, I’m worried that it might not be enough. People regularly underestimate how much money they will need in retirement, and don’t save enough. According to a survey by the Federal Reserve, only 36% of Americans felt their retirement savings were on track to meet their goals.

So, I’d recommend increasing your retirement savings by opening up another investment account where you will invest funds to draw upon in your retirement years. That could be an employer sponsored account like a 401K, or a “regular” investment account that you will make consistent contributions to for the long term.

Once you do that to secure your future financially, you can make other investments. You will still want to save money, but with your savings account already robust, you might want to consider saving less, and investing more. Make sure you budget for investing, just like you would for saving. 

I know what you’re thinking: aren’t the markets performing badly? That’s true, but this is a good time for you to get stocks and other assets for a lower price. This way, when the markets start to perform better, you’ll be able to benefit from the bigger gains.

So where do you begin? You already have a brokerage account for your IRA and for ease, I’d recommend sticking with that same brokerage and opening up another investment account. Fund it regularly and consistently. The simplest way to invest is to put your money into index funds and exchange-traded funds (ETFs). That way, you won’t have to pick any individual stocks, and you’ll be able to lower your risk as the markets bounce around. 

Once you’ve decided what you’d like to buy, invest in those assets regularly, regardless of the ups and downs in the market. This is called dollar-cost-averaging, and over time, is a good way to manage risk and ensure you aren’t spending too much on the investment by buying it infrequently. 

If you do this regularly you’ll find that you will amass a nice nest egg for yourself that you could use to buy a house, pay for a wedding, or even fund a nice vacation. Investing doesn’t just have to be for retirement, and the sooner you start, the more money you’ll have to spend on things that are important to you—without tapping into that savings account.

Good luck!


If you have questions about money, Kristin is here to help. Submit an anonymous question and she may answer it in a future column.

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  1. Board of Governors of The Federal Reserve System. “Economic Well-Being of U.S. Households in 2020 - May 2021.”

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