3 Smart Ways to Invest Your Money in 2024

It's hard to believe that 2024 is right around the corner. But before you know it, we'll be ringing in the new year.

You may be eager to put your money to work by investing it savvily in 2024. Here are three options worth considering.

1. Sign up for your company's 401(k)

If your employer offers a 401(k) plan, it pays to take advantage of it for a few reasons. First, assuming it's a traditional 401(k), your money will go in tax-free, thereby shielding some of your income from the IRS.

Many employers that offer 401(k) plans also match worker contributions to some degree. So you may have an opportunity to score some free money for your retirement.

Now, maxing out a 401(k) in 2024 may prove difficult because the contribution limits next year are rising to $23,000 for workers under age 50, and $30,500 for those 50 and over. But remember, you don't have to max out if that's not close to being feasible. Rather, you can start with the goal of contributing enough to take advantage of your full employer match.

One thing you should know about 401(k)s is that they generally do not allow you to invest in individual stocks, whereas IRAs do. Because 401(k)s tend to limit savers to different funds, it's important to find a cost-effective option -- meaning, funds that generate strong returns without charging exorbitant fees.

It could pay to invest your 401(k) in low-cost index funds. These funds are passively managed and simply track different market benchmarks, so the fees are generally quite reasonable compared to what you might pay to invest in actively managed mutual funds.

2. Take advantage of a Roth IRA

A Roth IRA won't give you a tax break on your contributions like a traditional IRA or 401(k). But what you will get is tax-free investment gains in your account, as well as tax-free withdrawals. And that's huge.

Think about how much you hate paying taxes now. Then, imagine how much of a problem taxes might be if your income drops in retirement. Knowing you won't have to pay a portion of your income to the IRS could make a big difference at that stage of life.

In 2024, IRAs (both traditional and Roth) max out at $7,000 for savers under 50 and $8,000 for those 50 and over. You don't have to max out your Roth IRA contributions next year if that's not doable, but it may be a more attainable goal than maxing out a 401(k).

3. Contribute to an HSA

Healthcare expenses can arise at any time, so it's important to be prepared for it at all times. And putting money into an HSA is a great way to do that.

HSAs, or health savings accounts, give you the benefit of tax-free contributions. You can also invest the funds you don't need right away, and gains in your account will be tax-free. Withdrawals are also tax-free when used to cover qualified medical expenses.

You'll need to make sure your health insurance plan is compatible with an HSA to contribute in 2024, however. If you have self-only coverage, your plan needs a minimum deductible of $1,600 and an out-of-pocket maximum of $8,050. If you have family coverage, your plan needs a minimum deductible of $3,200 and an out-of-pocket maximum of $16,100.

The amount you can contribute to an HSA in 2024 will also hinge on your coverage and age. For self-only coverage, your limit is $4,150 if you're under 55, or $5,150 if you're 55 and over. For family coverage, your limit is $8,300 if you're under 55, or $9,300 if you're 55 and older.

Investing your money the right away in 2024 could set the stage for many years of financial security. It pays to consider these options in the new year for putting your money to work.