When participating in Lockheed Martin’s generous retirement savings program, it can be intimidating to figure out the various aspects of investing. What types of investments are there? What accounts should you contribute to? Keep reading and we’ll help answer these questions for you!

Beginning with asset allocation, this is simply the mix of the various types of investments within a particular account. Usually, stocks and bonds are the main two components, but sometimes there are less common securities as well such as real estate or gold. An 80/20 asset allocation means the account consists of 80% equities (stocks) and 20% fixed income (bonds). Asset allocation varies depending on your risk tolerance, financial goals, and time horizon.

Asset location, on the other hand, involves the type of account the investments are housed in. Investment accounts mainly differ by their tax treatment. For example, non-qualified accounts such as a brokerage account don’t have any special tax advantages. IRAs and 401(k)s have tax-deferral, meaning no tax is paid on contributions, only on future withdrawals. Roth IRAs and Roth 401(k)s have taxation on contributions but none for withdrawals. Investments themselves have different tax consequences as well and therefore it is important to determine which type of account should contain certain investments for maximum tax efficiency.

If you would like assistance in determining your portfolio asset allocation and ideal asset location as you head into retirement, book an appointment with a Lockheed Martin retirement specialist!

For more tips like these, click here to sign up for our weekly email blog newsletter. If you would like to get better educated on Lockheed retirement strategies, click here to download our Free Report titled Retire with Confidence: The Top 4 Things You Can Do Now to Maximize your Lockheed Retirement. And, if you want to have face time with a Lockheed Retirement Specialist², you can click here to schedule an appointmentclick here to sign up for our Lockheed Retirement Workshop or click here to just give us a call (817) 210-3444.

Be sure and check back next week for more incredibly valuable information. Cheers!

Disclosures*

Financial Planning and Investment Advisory offered by SWMG, LLC a Registered Investment Advisor.

Lockheed Martin Retirement Specialist is not an official title or professional designation nor is it conferred by Lockheed Martin on any individual or company.

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