Today, I’d like to CONTINUE our video series on different types of accounts investors should open…
First, let’s discuss a Brokerage Account: A brokerage account, or taxable investment account, that allows for buying and selling various investments, including stocks, bonds, mutual funds, and exchange traded funds. Alternative investments can also be held in these accounts if desired. A brokerage account can be opened through your financial advisor or the many large online platforms (like, Schwab, Fidelity, and so forth).
There are no inherent tax benefits to utilizing a brokerage account, but they can be useful to save money for a variety of different goals. For example, if you want to do a renovation on your house in a few years, you can use the brokerage account to invest in money market mutual funds, which offer higher yields on your cash than a checking and savings account. If you have a longer-term goal, like saving for Moishe’s Bar Mitzvah in 7 years, you may want to consider investing in stock and bond mutual funds to possibly experience more growth with these funds.
Money in a brokerage account can also be used for longer-term goals, like buying a condo in Miami in 15 years, paying for a chosana in 18 years, or to supplement your retirement savings. There are many different sensible ways to utilize a brokerage account to save for your varied goals.
Now, let’s discuss Retirement Accounts: It is imperative for every family to save for retirement. At some point down the road, everybody wants the option to either retire or cut back on working. Many people may no longer be able to work as they get older due to health concerns. Therefore, saving and investing funds to be able to retire in the future is essential.
Thankfully, there are many ways to save for retirement. The option you choose may depend on your employment situation and tax status. I will highlight just a few options:
One option is an IRA: An IRA, or Individual Retirement Account, which is a tax-advantaged investment account designed to help people save for retirement. Anyone can open this account as long as you or your spouse has earned income. You can deposit up to $7,500 annually if you are under 50 years old, $8,600 if you are over 50, and have at least that amount of income (these are 2026 numbers, by the way). Utilizing a traditional IRA will come with tax deferred growth and potentially a tax deduction, while utilizing a Roth IRA will allow for tax free withdrawal of funds in retirement. There are restrictions based on your level of income and marital status that should be considered before depositing funds in these accounts. Deposits in these accounts can be invested in stocks, bonds, or funds based on your time horizon.
Next, there are various types of Corporate retirement accounts:Corporate retirement accounts come in many shapes and sizes, including 401(k), 403(b), 457, and SEP. An entire series of videos can be made on these accounts and their various nuances without even scratching the surface. The important thing for viewers to understand is that these retirement vehicles make it seamless for employees to save for retirement since the funds typically come right out of your paycheck and are invested automatically. Oftentimes your employer may contribute to your account through a company match.
It’s worth speaking to your Human Resources department or CFO to review your options. I strongly encourage my clients to make the most of these accounts, which means maxing out the full contribution limit (which is $24,500 in 2026 for a 401(k), if you are under 50 years old) and your employer may contribute a match on top of that. A company retirement plan typically has a list of options in which you can invest. The key is picking investments that are suitable for your time horizon and financial goals.
In my next video I will cover various accounts that many frum families use for their children, trusts, and charitable giving.