So you’ve reached the point where your 401(k) is maxed out, but you have more money you want to put away for your retirement.  Now is the time to consider other savings options to keep your money safe and allow it to grow at the same time.  Many factors such as your income, tax bracket, and how close you are to retirement will affect which one is most beneficial for you.

Traditional IRA

One option is a traditional IRA.  Your money will earn money, and you won’t pay taxes on it until you retire; this is especially nice because your income will be lower, placing you in a lower tax bracket.  It’s also tax-deductible until you withdraw, and there is no income limit to qualify.  You need to be careful here, though, as there is a 10% tax penalty for early withdrawal, and your spouse’s income or employer-provided 401(k) may affect your eligibility and/or your contribution limit.

Nondeductible IRA

A nondeductible IRA can be a good option if you are not going to be retiring soon but you have maxed out your 401(k) and do not qualify for a traditional IRA.  This one is not tax-deductible since you contribute after-tax money, but just like a traditional IRA, it is taxed as though it was ordinary income rather than other types of savings gains, and you won’t have to pay until it’s time to withdraw.

Roth IRA

A Roth IRA is a good choice if you are still working with no plans to retire soon.  This one is also not tax-deductible, but it is essentially tax-free.  You can start to withdraw money five years after opening the account without an early withdrawal penalty, but there is an income limit in order to qualify for this one.  If you file taxes as single, your income limit is $95,000.  Couples must make less than $150,000 combined.

Pay Off Debt

This one is always a good option.  If you’ve maxed out your 401(k) but have quite a bundle of debt, you’ll want to pay it off before you retire and are living on a lower income.  You can use all of your extra money that would be going into your 401(k) for your debt, or find a balance between this and depositing money into an IRA.

Other options include regular savings (which won’t net you as much gain), mutual funds, variable annuities, etc.  There is some debate over whether variable annuities are beneficial due to annual fees, contract fees, and the potential for loss, so if you’re considering this one, do some research and try to stick to annuities with low fees.

Your mortgage payment stares you in the face every month, and you wonder about the fastest way to eliminate it.  Then you start daydreaming about all the things you could do if you didn’t have to hand that nice chunk of change over to anyone else—but it will be 30 years until you reach that point, right?  Not necessarily.  There are ways to shave some of that time away.

Biweekly Payments

One common method is to make biweekly payments instead of one monthly payment.  This will result in one extra yearly payment, cutting down the length of your loan by 6-8 years.  You’ll be paying half of your monthly payment every two weeks, so you may have to adjust the rest of your bill payments to make sure you stay ahead.  And you should speak with your lender to make sure that if you begin this plan, your first payment of the month will be immediately applied to your loan.  If your payment will instead be held until the other half is received, this may not be a worthwhile option for you.

Extra Payments to Principal

Most of your mortgage payment goes toward interest in the first few years of owning your home.  This will make it difficult to get a jump on paying off your loan early.  However, if you do send an extra payment, make sure to mark it specifically as an “extra payment toward principal” to prevent it from being applied to your interest.  Your caution here is to realize that in affecting how much interest you pay during the year, you will also be affecting your taxes since interest is tax-deductible.  Talk with your lender on this option to ensure that you won’t cause an unwelcome surprise during tax season.

Mortgage Accelerator

This method is fairly new to the US but has been popular in Australia and the UK for some time, according to www.moneycentral.msn.com.  This one is a little more complicated, involves some fine print, and you have to qualify for it.  The main idea is that you deposit your entire monthly (or biweekly) paycheck into an account tied directly to your mortgage.  In essence, you’re putting all of that money toward the loan.  So how do you pay for your other monthly expenses?  You’re given a line of credit that you can draw money against.  Of course, with this option, you can’t currently be spending more than you’re making.  Check out www.macquarie.com and www.cmgfs.com (CMG Financial Services) to learn the entire picture, read all of the fine print, and determine if you qualify.

What about the people that say they’ve paid off their mortgages in 5 or 10 years?  You’ll have to read the individual stories floating on the internet.  Many of them used much more aggressive strategies than the 3 listed above, applying every last cent toward their mortgage payments and “living like college students.”  If you’re not interested or able to be that aggressive but you do want to make extra payments somehow, simply create a budget and see where you can cut back.  You might want to skimp on certain little luxuries or even pick up a part-time job for extra cash.

Your baby will be attending college in 18 short years or less, so it’s time to start saving.  And if you think college was expensive for you, just wait until you see the costs for your child.  According to the website popularbabyproducts.com, the average cost for college in 2008 was just over $100,000 for all four years.  If your child wants to attend a private college, such as Harvard, the 4-year price tag is closer to $250,000.

Now consider the fact that college costs continue to rise, even right now, despite the recession.  Colleges are losing money and donors just like other businesses, and the difference is made up in tuition payments.  When your child enters college in 18 years, expect to pay $250,000 over 4 years for a public school and $500,000 for a private school.

Start Saving Right Now

Such high numbers can seem a little frightening.  Who has that kind of money?  Should you even bother saving anything?  The answer is yes.  And your first task is to stop worrying—nobody can realistically save up enough money to cover all four years.  (If you do believe you can reach that goal, absolutely go for it; just don’t let the idea cause stress.)  Anything you can afford to save will add up, even if it’s only $50 or $100 per month, and the earlier you start, the more you’ll have in the end.

Different Savings Options

You can opt to stick with a regular savings account, but you won’t yield as much growth as you could with other options.  Especially if you’re starting soon after the birth of your child or in the toddler years, you might consider investing in stocks or mutual funds to get the highest returns on your money.  Of course, doing so is a little riskier since there’s the potential for loss, but the gains over time can outweigh any minor losses you’ll encounter.

At any point before your child enters college, you can also check out a 529 savings account.  You deposit money like normal, but any interest earned is not taxed if it is used for education expenses, and that includes anything—tuition, room and board, textbooks, etc.  You can also try programs like U-Promise (www.upromise.com).  This is a credit card rewards program that helps you save for college by rewarding you for eligible everyday purchases.

Financial Aid and Scholarships

It’s true that the amount you have saved up will affect how much financial aid your child is eligible for.  Financial assistance programs take an “expected family contribution” into consideration, and this is based on your income and your savings.  Don’t let that discourage you from saving—you want your child to leave college with as little debt as possible.  The amount you save will offset the amount your child would need in the way of financial aid.  And don’t forget about scholarships.  Encourage him or her to apply for as many as possible before resorting to student loans.

For those taking classes in online universities, you too can benefit from financial aid. And even if your child enters college next year, it’s never too late to start saving (and teach your child how to save, too).