the IRS has increased contribution limits for 2025 and since it is a new year let's bring a fresh start to our money this is a really perfect time to check in with your investing so today I'm going to share how to invest the right way in 2025 and stick around because at the end I'm sharing one thing that I never recommend you invest in now before we get started make sure to subscribe and maybe share this episode with a friend who loves a great investing tip so as I mentioned let's go over some updated numbers so you can be aware so the IRA limit is $7,000 which is the same limit of contributions that was in 2024 the IRA catchup limit for people over 50 is an extra ,000 which was the same in 2024 the 401K limit has increased but by only $500 so now it's at $23,500 for 2025 for single taxpayers and married people filing separately the standard deduction is rising to $15,000 which is up $400 couples filing jointly standard deduction is now $330,000 which is an $800 increase from 2024 heads of household will get $22,500 as a standard deduction and that is a $600 increase from 2024 so so some great standard reductions and when it comes to tax time you guys that is something to look into so instead of itemizing your taxes maybe just take that standard reduction and you may get more out of that than itemizing all right another stat that I saw recently is that 89% of employers offer a company match now which is great news because a little over 10 years ago in 2013 it was about 58% and I always think this is great this is definitely um you know a benefit that companies give you it's not required but it is a great benefit for people that are investing in retirement when your employer can match you a certain percentage it's basically free money going into your retirement so thank you employers out there who do that because I think it's wonderful all right now let's go over specifics for investing this year so first things first let's define the why so why investing is crucial number one it is a great way for your money to work for you while you're sleeping okay it's one of these things you put money in and over time it will start to grow on its own you don't have to put more money in even though I recommend you do but it just continues to grow and I think that it's a wonderful thing because longterm especially if you start early that growth is going to continue to compound and when you get to retirement age you're going to have a lot of money sitting there so that you can retire and live off of that money you saved for so you don't have to work until your old age and the hard thing is a lot of people start this you know later in life so they have more catching up to do but overall this idea of preparing for your future is key ke so much of our money decisions feels like a day-to-day decision or like even in the next year or two but when you think really long term and for some of you depending on your age it could be really long term with retirement but it is still so key to plan for your future and always remember that you are in charge of your future yes there is Social Security and different other you know programs out there but overall the best bet for you to have a great retirement is up to you so investing is a great way to do that now before we talk about when and where when it comes to investing I do want to tell you about one of our sponsors delete me I saw a headline recently that really caught my attention onethird of the US population's background info is now public so for 115 million of us data breaches mean that our info is out there for anyone to find so this is stuff like our names and addresses and phone numbers and so much more and this is why I love delete me because they go in and they find and remove your personal information from hundreds of data broker websites that will buy sell and trade your personal data so take control of your online privacy with delete me individual delete me plans start as low as $9 a month sign up today at join delet me.com Rachel for 20% off or click the link in the description all right next is to know when you should start investing so when to start investing is going to depend on where you are financially so I want you completely out of debt except for your house which for some people that's going to take you know 18 to 24 months months and when you're on your debt-free journey I even encourage you to pause retirement investing even if you're getting that match from your employer like we talked about throwing all of your money at getting out of debt as soon as possible is going to be so key because your income is your largest wealth building tool your income that comes in from your job is how you're going to continue to build wealth but when your income comes in and it goes out 18 different directions in the form of payments it's harder to build wealth so getting out of debt is really key and then making sure you have money saved in the bank which is a 3 to six month emergency fund is also really important cuz when stuff comes up not if but when and this could be job losses a move medical emergencies like things that may just come up out of the blue that you have cash in the bank to take care of those versus having to pull money out of investing your retirement where you're going to have to pay taxes and possibly penalties having cash liquid is really important so that 3 to six month of expenses that emergency fund you could just keep in a high yield savings account and then after those are complete then you want to start investing and so you want to invest 15% of your income into retirement so take your household income and say okay 15% of that is going to go into retirement so now we're going to talk about where that 15% goes and where to invest your money so when it comes to retirement specifically uh there are some great plans out there that are tax favored so the Roth IRA for example is one it's the one we mentioned earlier that you can invest up to $7,000 in now there's a traditional Ira that you can open up but you're going to fund that with pre-tax dollars meaning before you pay taxes that income that you make you can take money out of that and fund your IRA but the catch is when you pull money out of that Ira when it when you're 59 a half and you can you're going to pay taxes on the growth so if you start early like in your 20s or 30s you're going to have a lot of growth which means you're going to pay a lot of taxes versus if you do a Roth IRA and the Roth IRA is after tax money so after you've paid taxes and done all that the money that hits your account that's the money you use to fund the RO Roth IRA but it is worth doing that again after you PID taxes on your income because the growth is taxfree and again it's a lot of growth like in some cases you guys hundreds of thousands of dollars of growth that you don't have to pay taxes on which is amazing so the Roth IRA is great next is the 401K that we talked about and this is where your employer can match a certain percentage now in the Roth IRA and the 401K and then I would also so say the 403b which is like a 401k but that's more for um government type jobs so teachers for instance or nonprofits will have that side all of these need to be invested you're going to take these kind of look at them as like a high level umbrella and then underneath what the money's actually invested in are mutual funds which are 90 to 200 stock So within that investing in good mutual funds is what's going to be really key but again it's protected over this umbrella of retirement with the Roth IRA and the 401 1K or 403b now some employers as we keep getting deeper into this some employers offer a Roth 401k okay so meaning you still get all the benefits of a 401k but you're going to do it with after tax dollars to put in your 401k and the growth in your 401k is also tax-free if you have a traditional 401K you will pay taxes on the growth but if your employer offers a Roth 401k it's amazing and take it all day long because again that growth is free so always remember Roth means the growth is tax-free yay traditional eh not taxfree not as great so always remember those lanes and then when you're investing your 15% remember this formula match beats Roth beats traditional so you're going to go in and go ahead and go up to your employer's match if if you have a match at your job and so let's say they match 4% and so you're going to go up 4% which means you have 11% left of that 15% go ahead and take that 11% go ahead and and fill out your Roth IRA and it's $7,000 now if you if that's $7,000 you hit that limit and you have more more percentag of that 15% you can go back to your 401k so that's kind of the formula you want to do because we want to take as much as we can for those tax Vantage accounts because they're going to help you long term now one question I get a lot is about diversification and so always remember this when you diversify that just means you're spreading your money around and so that's why I love mutual funds because there's 90 to 200 stock in a mutual fund right so if Apple's having a bad year Well Ford and Toyota and Southwest and whoever else may be having a great year right so overall you're spreading your money around these different companies which is fantastic versus putting all your eggs in one basket and really concentrating on one stock that's more of a Gamble and I don't care for that so I love mutual funds all right one thing I never recommend investing in yet is crypto mhm okay I say yet because this still is an evolving investment now crypto you know we usually kind of like poo poo on it because it doesn't have a long-term track record it's a little bit volatile it's a it's still just a little bit new and again if I'm going to be putting my money in something I just want it to know that it's going to grow and when you go and invest in those mutual funds like we talked about the the basically the average has been around 11.8% overall so you're going to have some down years but overall you know what the average is crypto is all over the place and I would say this too it's full of scams there's so many lawsuits out there in this industry because people are opening up these fraud type companies and it's not regulated and that's the double-edged sword I kind of like that it's not regulated I mean yeah there's a part of me that's like yeah let the people run I I don't think that's a terrible thing actually but also you want to make sure that it's proven out and that you're not getting scammed in the process so I don't don't suggest investing in crypto if you do I would make it a very very small percentage of your world because it is still pretty volatile all right those are the basics when it comes to investing it can be a little bit complicated but also you know pretty simple right the details can be a little tricky but I also think this is a really important part of your financial picture that you want to get right so I would connect with a smart Vestor Pro I'll put a link down below so you can connect with one near you but sitting down with someone and looking over for your entire financial plan including your Investments is a really really smart thing to do it's a very adult-like thing it can feel intimidating but I would have someone in your corner that's looking over everything I think it's really really important now for a deeper dive into my investment strategy check out my annual investment routine right here or click the link below all right you guys remember to take control of your money and create a life you love
