Why Consider Alternative Investments in Your 401(k)?
Did you know you can use alternative assets in your 401(k)? Alternative investments are becoming more and more important in retirement portfolios. Globally, over 25% of pension funds included them in 2019, up from just 5% in 1996.
By diversifying with alternatives like SBF notes, you can add growth potential and stability, as these assets are less linked to market swings, helping to cushion you against losses.
Plus, alternative investments also have the potential to give you much higher returns. That’s because alts can tap into different markets and opportunities that aren’t normally accessible through traditional investments like stocks and bonds.
Getting Started with Alternative Assets in Your 401(k)
To access alternatives, you’ll need a self-directed 401(k), which offers you broader asset options.
A balanced approach could include 60% in stocks and bonds, with 40% in alternatives like private equity or merchant cash advances.
Your mix depends on your risk tolerance and financial goals.
Tax Benefits for Greater Returns
With tax-deferred growth in your 401(k), alternative investments can let your investment grow without immediate tax deductions. This approach supports compounding growth, enhancing your portfolio over time.
If you add alternatives to your 401(k), you can diversify and potentially strengthen your retirement income strategy.
Do you want to know more about how to integrate alternative assets into your 401(k)?
Take our Interactive Quiz to learn more.
