Self-Directed IRA for Real Estate Investing Explained

A self-directed IRA (SIDRA) allows you to save money for retirement on a tax-advantaged basis while enjoying access to a broader range of investments. Opening a self-directed IRA for real estate investing is an opportunity to diversify your portfolio with an alternative asset class while potentially generating higher returns.

Using a self-directed IRA to invest in real estate offers the added benefit of either tax-deferred growth or tax-free withdrawals in retirement, depending on whether it’s a traditional or Roth IRA. Before making a move, however, it’s important to know how they work. The IRS imposes self-directed IRA real estate rules that investors must follow to reap tax benefits.

What Is a Self-Directed IRA?

Individual Retirement Accounts (IRAs) allow you to set aside money for retirement with built-in tax benefits. These retirement accounts come in two basic forms: traditional and Roth.

Traditional IRAs allow for tax-deductible contributions, while Roth IRAs let you make qualified distributions tax-free.

When you open a traditional or Roth IRA at a brokerage you might be able to invest in mutual funds, exchange-traded funds, or bonds. A self-directed IRA allows you to fund your retirement goals with alternative investments — including real estate.

You can do the same thing with a self-directed 401(k).

Self-directed IRAs have the same contribution limits as other IRAs. For 2024, you can contribute up to:

•   $7,000 if you’re under 50 years of age

•   $8,000 if you’re 50 or older

Contributions and withdrawals are subject to the same tax treatment as other traditional or Roth IRAs. The biggest difference between a self-directed IRA and other IRAs is that while a custodian holds your account, you manage your investments directly.

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💡 Quick Tip: Want to lower your taxable income? Start saving for retirement with an IRA account. With a traditional IRA, the money you save each year is tax deductible (and you don’t owe any taxes until you withdraw the funds, usually in retirement).

How Self-Directed IRAs for Real Estate Investing Work

Using a self-directed IRA to invest in real estate allows investors to invest in various funds or securities that, themselves, invest in property or real estate. Those securities may be real estate investment trusts (REITs), mutual funds, or ETFs focused. Investors with self-directed IRAs can, then, direct retirement account funds toward those securities.

Other types of real estate investments can include single-family homes, multi-family homes, apartment buildings, or commercial properties — actual, physical property. For investors who do want to buy actual property using an IRA, the process generally involves buying the property with cash (which may require them to liquidate other investments first), and then taking ownership, which would all transact through the IRA itself. It’s not necessarily easy and can be complicated, but that’s the gist of it.

With that in mind, the types of investments you can make within an IRA will depend on your goals.

For instance, if you’re interested in generating cash flow you might choose to purchase one or more rental properties using a self-directed IRA for real estate. If earning interest or dividends is the goal, then you might lean toward mortgage notes and REIT investing instead.

The most important thing to know is that if you use a retirement account to invest in real estate, there are some specific rules you need to know. For instance, the IRS says that you cannot:

•   Use your retirement account to purchase property you already own.

•   Use your retirement account to purchase property owned by anyone who is your spouse, family member, beneficiary, or fiduciary.

•   Purchase vacation homes or office space for yourself using retirement account funds.

•   Do work, including repairs or improvements, on properties you buy with your retirement account yourself.

•   Pay property expenses, such as maintenance or property management fees, from personal funds; you must use your self-directed IRA to do so.

•   Pocket any rental income, dividends, or interest generated by your property investments; all income must go to the IRA.

Violating any of these rules could cause you to lose your tax-advantaged status. Talking to a financial advisor can help you make sense of the rules.

Pros and Cons of Real Estate Investing Through an IRA

Using a self-directed IRA for real estate investing can be appealing if you’re ready to do more with your portfolio. Real estate offers diversification benefits as well as possible inflationary protection, as well as the potential for consistent passive income.

However, it’s important to weigh the potential downsides that go along with using a self-directed IRA to buy real estate.

Pros

Cons

•   Self-directed IRAs for real estate allow you to diversify outside the confines of traditional stocks, bonds, and mutual funds.

•   You can establish a self-directed IRA as a traditional or Roth account, depending on the type of tax benefits you prefer.

•   Real estate returns can surpass those of stocks or bonds and earnings can grow tax-deferred or be withdrawn tax-free in retirement, in some cases.

•   A self-directed IRA allows you to choose which investments to make, based on your risk tolerance, goals, and timeline.

•   The responsibility for due diligence falls on your shoulders, which could put you at risk of making an ill-informed investment.

•   Failing to observe self-directed IRA rules could cost you any tax benefits you would otherwise enjoy with an IRA.

•   The real estate market can be unpredictable and investment returns are not guaranteed — they’re higher-risk investments, typically. Early withdrawals may be subject to taxes and penalties, and there may be higher associated fees.

•   Self-directed IRAs used for real estate investing are often a target of fraudulent activity, which could cause you to lose money on investments.

Using a self-directed IRA for real estate or any type of alternative investment may involve more risk because you’re in control of choosing and managing investments. For that reason, this type of account is better suited for experienced investors who are knowledgeable about investment properties, rather than beginners.

Real Estate IRAs vs Self-directed IRAs For Real Estate Investing

A real estate IRA is another way of referring to a self-directed IRA that’s used for real estate investment. The terms may be used interchangeably and they both serve the same purpose when describing what the IRA is used for.

Again, the main difference is how investments are selected and managed. When you open a traditional or Roth IRA at a brokerage, the custodian decides which range of investments to offer. With a self-directed IRA, you decide what to invest in, whether that means investing in real estate or a different type of alternative investment.

💡 Quick Tip: Did you know that opening a brokerage account typically doesn’t come with any setup costs? Often, the only requirement to open a brokerage account — aside from providing personal details — is making an initial deposit.

Opening an IRA With SoFi

Opening a self-directed IRA is an option for many people, and the sooner you start saving for retirement, the more time your money has to grow. And, as discussed, a self-directed IRA allows you to save money for retirement on a tax-advantaged basis while enjoying access to a broader range of investments, including real estate.

Once again, using a self-directed IRA to invest in real estate offers the added benefit of tax-deferred growth and tax-free withdrawals in retirement. There are pros and cons, and rules to abide by, but these types of accounts are another option for investors.

Ready to invest for your retirement? It’s easy to get started when you open a traditional or Roth IRA with SoFi. SoFi doesn’t charge commissions, but other fees apply (full fee disclosure here).

For a limited time, opening and funding an Active Invest account gives you the opportunity to get up to $1,000 in the stock of your choice.

FAQ

Can you use a self-directed IRA for real estate?

You can use a self-directed IRA to invest in real estate-related or -focused securities and other types of alternative investments. Before opening a self-directed IRA to invest in real estate, it’s important to shop around to find the right custodian. It’s also wise to familiarize yourself with the IRS self-directed IRA real estate rules.

What are the disadvantages of holding real estate in an IRA?

The primary disadvantage of holding real estate in an IRA is that there are numerous rules you’ll need to be aware of to avoid losing your tax-advantaged status. Aside from that, real estate is less liquid than other assets which could make it difficult to exit an investment if you’d like to remove it from your IRA portfolio.

What are you not allowed to put into a self-directed IRA?

The IRS doesn’t allow you to hold collectibles in a self-directed IRA. Things you would not be able to hold in a self-directed IRA include fine art, antiques, certain precious metals, fine wines, or other types of alcohol, gems, and coins.


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Neither the Investment Advisor Representatives of SoFi Wealth, nor the Registered Representatives of SoFi Securities are compensated for the sale of any product or service sold through any SoFi Invest platform.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Investment Risk: Diversification can help reduce some investment risk. It cannot guarantee profit, or fully protect in a down market.

Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.

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What Is the Difference Between Money Market Accounts vs CDs?

Money Market Account vs Certificate of Deposit

Both certificates of deposit (CDs) and money market accounts (MMAs) are types of savings accounts that tend to earn higher interest rates than traditional savings accounts. But there are some key differences between them.

An MMA allows you to withdraw money as needed (and even comes with checks or a debit card), though you may be limited to a certain number of transactions per month. With a CD, on the other hand, your money is locked up for a set period of time. In exchange for leaving your money untouched, however, CDs generally pay higher rates than MMAs.

Whether you should choose a CD or MMA will depend on your financial needs and goals. To help you make the right choice, here’s a closer look at how these two savings options compare.

Main Differences Between Money Market Accounts and CDs

Here’s a quick snapshot of the differences between money market accounts and CDs.

Money Market Accounts CDs
Interest rates Variable; typically lower Fixed; typically higher
Liquidity Highly liquid Lacks liquidity (early withdrawal incurs a penalty, in most instances)
Minimum balance requirements Higher than regular savings accounts Varies by CD
Debit card/checks Yes No

Money Market Accounts

A money market account (MMA) is a type of savings account offered by banks and credit unions that provides some of the conveniences of a checking account. Like a typical savings account, you earn interest on your deposits, often at a higher rate than what you could earn in a traditional savings account. In addition, these accounts typically come with checks and/or a debit card, making it easier to access your funds.

Money market accounts may come with withdrawal limits (such as six or nine per month), however, so they aren’t designed to be used as a replacement for a checking account. MMAs also often require you to keep a certain minimum balance in order to avoid fees or earn the advertised annual percentage yield (APY).

The money you deposit in an MMA is insured up to $250,000 by the Federal Deposit Insurance Corporation (FDIC), if held at an FDIC-insured bank, or by the National Credit Union Administration (NCUA), if held at an insured credit union. That means you can’t lose your money (up to certain limits) even if the bank were to go bankrupt or shut its doors.

Pros of Money Market Accounts

Here’s a look at some advantages of opening a money market account.

•   Higher interest rate: Typically, money market accounts have higher interest rates than traditional savings accounts.

•   Security: Because of the FDIC and NCUA insurance, the funds in a money market account are typically insured against loss.

•   Funds are liquid: You can withdraw your money when you need to (though you may be limited to a certain number of transactions per month).

•   Ease of access: It’s possible to access the funds in a money market account by withdrawing cash at an ATM, doing an electronic transfer, using a debit card, and/or writing checks.

Cons of Money Market Accounts

MMAs also have some disadvantages. Here are some to keep in mind.

•   Better rates may be available elsewhere: You may be able to find a high-yield savings account at an online bank that offers a higher APY than an MMA at a traditional bank (with potentially fewer restrictions and/or fees).

•   Minimum balance requirements: Banks often require a minimum deposit to open an MMA, as well as a minimum amount you must keep in the account in order to earn the top APY and/or or avoid a monthly maintenance fee.

•   Variable interest rate: APYs on MMAs are based on market interest rates at a given time. It’s difficult to predict how the market will perform and if this interest rate will rise or fall.

•   Limited growth potential: If you’re looking for long-term growth, you can potentially make more by investing your money in the market.

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Certificates of Deposits (CDs)

A certificate of deposit (CD) is a type of savings account that offers fixed interest rate that is generally higher than a traditional savings account. A CD also comes with a fixed-term length and a fixed maturity date. This means you need to leave the funds in a CD untouched for a set term, which can range anywhere from a few months to several years. Generally, the longer the CD’s term, the higher the APY, but this is not always the case.

CDs don’t charge monthly fees, but will typically have an early withdrawal penalty, and you usually can’t add any additional funds after the initial deposit.

CDs are offered by banks and credit unions: at credit unions, they are often referred to as share certificates. Like regular savings accounts, CDs are typically insured by the FDIC or NCUA, so you get your money back (up to $250,000) in the unlikely event that the bank or credit union were to go out of business.

Pros of CDs

Here’s a look at some of the advantages that come with depositing money into a CD.

•   Potentially higher rates: CDs tend to offer higher APYs than regular savings accounts and money market accounts.

•   Guaranteed rate of return: Because CDs typically have fixed rates for fixed terms, you know up front how much interest you will earn.

•   Security: Like other types of savings accounts, CDs are insured by either the FDIC or NCUA.

•   Convenience: It’s fairly easy to open a CD, since most banks and credit unions offer them.

Cons of CDs

There are also some disadvantages of CDs that you’ll want to bear in mind.

•   Relatively low returns: While CDs tend to earn more than a regular savings account, investing in stocks and bonds can be a better option if you’re looking to maximize your returns over the long term (though, unlike CDs, returns are not guaranteed).

•   Rates won’t go up: Because CDs come with fixed interest rates, the APY won’t go up even if market rates rise during the term of your CD (unless you open a bump-up CD).

•   No liquidity: Unlike other types of savings accounts, you can’t withdraw funds as needed. To benefit from a CD, you must wait until the CD term ends before you access your cash.

•   Withdrawal penalties: If you end up needing the money before the CD matures, you will likely incur an early withdrawal penalty.

When Should I Consider a Money Market Account or CD Over the Other?

MMAs and CDs have different requirements and benefits, and which one will serve you best will depend on your needs and preferences.

Choosing a Money Market Account Over a CD

A money market account may be a better choice than a CD if:

•   You want the option to add and withdraw money regularly. You can save money over time with a money market account. You can also withdraw the money at any time, though you may be subject to some restrictions.

•   You’re building an emergency fund. A money market account can be a good place to stash your emergency fund. You can likely maintain the minimum balance requirement and can benefit from the extra interest. Should you need the money, however, you can get it right away.

•   You’re saving for a large purchase. If you’re saving for a big ticket item like a car, a money market account will allow you to write a check from the account when you’ve reached your goal and it comes time to use those funds.

Choosing a CD Over a Money Market Account

A CD may be a better fit than a money market account if:

•   You have a longer-term savings goal. If you don’t need to use the money for a year or two, you may benefit from the higher returns offered by CD.

•   You want to make sure you don’t touch the money. If you’re setting aside money for a specific future expense, like a wedding or vacation, a CD helps insure you won’t impulsively spend it on something else.

•   You want some growth without risk. Unlike money invested in the market, the money you put into a CD is insured (up to certain limits) and the rate of return is guaranteed.

Recommended: How to Save Money: 33 Easy Ways

The Takeaway

Both money market accounts and CDs offer safe ways to earn more interest on your savings than you could in a traditional savings account. While money market accounts offer more flexibility and liquidity than CDs, CDs tend to offer higher APYs.

If you won’t need the money for a set period of time (say, six months to three years), and can find a good rate on a CD, you might be better off going with a CD over an MMA. If you may need to tap the funds at some point (but you’re not sure when), an MMA allows you to earn a higher-than-average interest rate while keeping the money liquid, with the added benefit of offering checks or a debit card.

Before choosing any type of savings account, however, it generally pays to shop around and compare current APYs. You may find another savings vehicle, such as a high-yield savings account, that offers the returns you want with minimal requirement, restrictions, or fees.

Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with direct deposit, you’ll get a competitive annual percentage yield (APY), pay zero account fees, and enjoy an array of rewards, such as access to the Allpoint Network of 55,000+ fee-free ATMs globally. Qualifying accounts can even access their paycheck up to two days early.

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FAQ

Are CDs or money markets better?

If you don’t need to access your funds for a while, a CD could be a better fit. CDs tend to offer higher interest rates than money market accounts, and the interest rate is fixed which makes the return predictable. Conversely, if you might need to draw on the funds in the near-term, an MMA may be a better route.

What are the tax implications of money market accounts vs. CDs?

With both certificates of deposit (CDs) and money market accounts (MMAs), the interest you earn is considered taxable income. You will receive a Form 1099-INT from your bank at the end of the year, which you must report on your tax return.

The Interest from CDs is typically taxed in the year it is earned, even if you don’t withdraw it until the CD matures. This means you might owe taxes on interest even if you haven’t received it yet. Interest on MMAs, however, is usually credited monthly and taxed in the year it is credited.

What are other options besides money market accounts and CDs?

Money market accounts and certificates of deposit (CDs) offer a low-risk way to earn a solid interest rate on your money. But they aren’t your only option. Here are some alternatives:

•   High-yield savings accounts. These accounts offer higher interest rates than traditional savings accounts and provide easy access to your funds with no fixed terms.

•   Treasury Securities. U.S. Treasury bills, notes, and bonds are government-backed securities that can offer competitive returns. They vary in term length and interest rate and are considered very safe investments.

•   Bond Funds. These mutual funds invest in a diversified portfolio of bonds, offering potentially higher returns than money market accounts and CDs, though they come with higher risk.


Photo credit: iStock/Vanessa Nunes

SoFi members with direct deposit activity can earn 4.60% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. Direct Deposit means a recurring deposit of regular income to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government benefit payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Direct Deposit”) via the Automated Clearing House (“ACH”) Network during a 30-day Evaluation Period (as defined below). Deposits that are not from an employer or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, or are non-recurring in nature (e.g., IRS tax refunds), do not constitute Direct Deposit activity. There is no minimum Direct Deposit amount required to qualify for the stated interest rate.

As an alternative to direct deposit, SoFi members with Qualifying Deposits can earn 4.60% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Qualifying Deposits means one or more deposits that, in the aggregate, are equal to or greater than $5,000 to an account holder’s SoFi Checking and Savings account (“Qualifying Deposits”) during a 30-day Evaluation Period (as defined below). Qualifying Deposits only include those deposits from the following eligible sources: (i) ACH transfers, (ii) inbound wire transfers, (iii) peer-to-peer transfers (i.e., external transfers from PayPal, Venmo, etc. and internal peer-to-peer transfers from a SoFi account belonging to another account holder), (iv) check deposits, (v) instant funding to your SoFi Bank Debit Card, (vi) push payments to your SoFi Bank Debit Card, and (vii) cash deposits. Qualifying Deposits do not include: (i) transfers between an account holder’s Checking account, Savings account, and/or Vaults; (ii) interest payments; (iii) bonuses issued by SoFi Bank or its affiliates; or (iv) credits, reversals, and refunds from SoFi Bank, N.A. (“SoFi Bank”) or from a merchant.

SoFi Bank shall, in its sole discretion, assess each account holder’s Direct Deposit activity and Qualifying Deposits throughout each 30-Day Evaluation Period to determine the applicability of rates and may request additional documentation for verification of eligibility. The 30-Day Evaluation Period refers to the “Start Date” and “End Date” set forth on the APY Details page of your account, which comprises a period of 30 calendar days (the “30-Day Evaluation Period”). You can access the APY Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking > Savings > Current APY or (ii) Banking > Checking > Current APY. Upon receiving a Direct Deposit or $5,000 in Qualifying Deposits to your account, you will begin earning 4.60% APY on savings balances (including Vaults) and 0.50% on checking balances on or before the following calendar day. You will continue to earn these APYs for (i) the remainder of the current 30-Day Evaluation Period and through the end of the subsequent 30-Day Evaluation Period and (ii) any following 30-day Evaluation Periods during which SoFi Bank determines you to have Direct Deposit activity or $5,000 in Qualifying Deposits without interruption.

SoFi Bank reserves the right to grant a grace period to account holders following a change in Direct Deposit activity or Qualifying Deposits activity before adjusting rates. If SoFi Bank grants you a grace period, the dates for such grace period will be reflected on the APY Details page of your account. If SoFi Bank determines that you did not have Direct Deposit activity or $5,000 in Qualifying Deposits during the current 30-day Evaluation Period and, if applicable, the grace period, then you will begin earning the rates earned by account holders without either Direct Deposit or Qualifying Deposits until you have Direct Deposit activity or $5,000 in Qualifying Deposits in a subsequent 30-Day Evaluation Period. For the avoidance of doubt, an account holder with both Direct Deposit activity and Qualifying Deposits will earn the rates earned by account holders with Direct Deposit.

Members without either Direct Deposit activity or Qualifying Deposits, as determined by SoFi Bank, during a 30-Day Evaluation Period and, if applicable, the grace period, will earn 1.20% APY on savings balances (including Vaults) and 0.50% APY on checking balances.

Interest rates are variable and subject to change at any time. These rates are current as of 10/24/2023. There is no minimum balance requirement. Additional information can be found at https://www.sofi.com/legal/banking-rate-sheet.


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Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.

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What Is the Average Salary by Age in Florida in 2024?

If you’re a Florida resident, you may wonder how your salary stacks up against your peers in other states. Or you might wonder about the type of salary you might earn if you move to the Sunshine State.

The U.S. Census Bureau American Community Survey reveals that of all Florida’s workers, those aged 45 to 64 see the highest median household income, at $82,587. The overall median household income in Florida is $69,303.

But what is the average salary in Florida across the board? A typical worker here collects an average annual salary of $48,966 in 2024, or $4,080 per month.

We’ll examine the average salary in Florida in a few different ways: by age, city, and county. We’ll also share examples of the highest-paying jobs in Florida to give you a better understanding of Floridians’ take-home pay.

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Average Salary in Florida by Age in 2024

What is the average salary in Florida by age? The most recent data shows the following annual average income by age among Floridians:

•   Under 25 years: $42,617 annually

•   25 to 44 years: $77,487 annually

•   45 to 64 years: $82,587 annually

•   65 years and over: $52,625 annually

As you can see, a gap exists between the salaries of under-25 residents (which can include high school and college-aged students) and those aged 25 to 44. Average salaries peak for workers aged 45 to 64, and decline among those aged 65 years and older.

Floridians’ salaries reflect a national trend in peak earning years. Earnings typically reach their highest point when workers are in their late 40s to late 50s. Women’s peak earning years occur between ages 35 and 54, and men’s peak earning years hit between 45 and 64.

According to data from the Social Security Administration, the average salary in the U.S. is $63,795. And just like in Florida, a few factors contribute to earnings: location, industry, education level, and demand, to name a few.

Average Salary in Florida by City in 2024

It’s important to note that while we’re listing the average salary in Florida by city in the next section (and by county in the section after that), it’s just an average — the number of incomes divided by the number of workers. You may earn above or below the average salaries listed.

Per ZipRecruiter, some average salaries in Florida by city include the following:

•   Island Walk: $85,574

•   Juno Beach: $78,624

•   Ocean Breeze Park: $78,184

•   Meadow Oaks: $77,940

•   Harbor Bluffs: $77,661

•   Port St. Lucie: $60,862

•   Boynton Beach: $57,346

•   Sunrise: $57,086

•   Orlando: $56,808

•   Miramar: $56,673

Standards of living — and the salary you need to earn to maintain them — vary by city. For example, a low-end middle-class income in Miami, Fort Lauderdale, and West Palm Beach is $43,000, while a high-end middle-class income is $128,000. No matter where you live in the state, a budget planner app can help you make the most of every dollar you earn.

Recommended: What Is the Average Pay in the United States Per Year?

Average Salary in Florida by County in 2024

The average salary in Florida by county can depend on a wide range of factors, including that area’s need for skilled workers. For example, living in a large metropolitan area with a variety of jobs can draw residents and change the trajectory of a county’s average salary.

The median household income in select counties in different parts of Florida includes:

•   Palm Beach County: $70,979

•   Collier County: $62,660

•   Seminole County: $60,623

•   Hamilton County: $56,945

•   St. Johns County: $56,425

•   Glades County: $52,466

•   Citrus County: $46,763

•   Hendry County: $48,891

•   Madison County: $39,023

•   Holmes County: $34,379

From September 2022 to September 2023, employment increased in all of Florida’s 26 counties, according to the Bureau of Labor Statistics. In Miami-Dade County, employment increased particularly in the areas of healthcare and social assistance.

Examples of the Highest-Paying Jobs in Florida

Some of the largest industries in Florida include advanced manufacturing, aerospace and defense, clean energy, information technology, life sciences, and logistics and distribution.

You might be curious about snagging one of the highest-paying jobs in Florida. Here’s a list of the average salary of some of the highest-paying jobs in Florida:

•   Finance services director: $211,022

•   Staff psychiatrist: $205,364

•   Associate medical director: $195,656

•   Physician: $193,805

•   Clinic physician director: $189,373

•   Physician extender: $186,136

•   President/chief executive officer: $185,121

•   Family practice physician: $184,438

•   Pain management physician: $184,207

•   Vice president of sales: $184,032

Many types of high-paying jobs require advanced degrees, and as you can see from the list above, some job titles, including that of a physician, require a significant amount of education.

Therefore, you may also want to consider the most in-demand jobs in Florida, which include the following:

•   Mental health counselor: $30,112 to $142,147 annually

•   Occupational therapist: $40,215 to $136,890 annually

•   Management analyst: $41,118 to $104,843 annually

•   HR manager: $48,124 to $102,655 annually

•   Financial analyst: $48,631 to $97,214 annually

If none of the above fit your credentials or interests, many options abound, including jobs for introverts and for those just starting their careers.

Wherever you are in your professional journey, it’s a good idea to have some short- and long-term financial goals in mind. Tools like a money tracker can keep tabs on where your money goes and also provide valuable insights on your finances.

Recommended: What Is a Good Entry-Level Salary?

The Takeaway

Planning to relocate to the Sunshine State? The average annual salary is $48,966, which is lower than the national average. Still, Florida offers no shortage of opportunities for job seekers, no matter your field or interest area. If you want to lock yourself into a certain salary, research job opportunities in your field, check out the educational requirements, and consider interviewing individuals in the area you’re interested in to learn more about their path and trajectory.

Take control of your finances with SoFi. With our financial insights and credit score monitoring tools, you can view all of your accounts in one convenient dashboard. From there, you can see your various balances, spending breakdowns, and credit score. Plus you can easily set up budgets and discover valuable financial insights — all at no cost.

See exactly how your money comes and goes at a glance.

FAQ

What is a good average salary in Florida?

In Florida, a good average salary might start at $69,000 for a single individual (without kids). On the other hand, a couple might require up to $94,500 to make ends meet and allow money for fun as well. However, every individual is different, and budgeting techniques can help you carve out money for fun and relaxation no matter your income.

What is the average gross salary in Florida?

The average annual salary is $48,966 in Florida in 2024. This number includes all counties and cities in Florida. However, many factors determine your earning potential, including your location, the cost of living, the job market, industry in an area, and the surrounding competition.

What is the average income per person in Florida?

The Florida average annual salary in 2024 is $48,966. However, this number takes into account all individuals in the Sunshine State, including all ages and all career types. You may earn above or below that amount, depending on your field, location, and other factors.

What is a livable wage in Florida?

A good average salary in Florida of $69,000 breaks down to a monthly salary of $5,750 and a biweekly salary of $2,653.85. It also translates to a weekly salary of $1,326.92, and an hourly wage of $33.17.


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SoFi Relay offers users the ability to connect both SoFi accounts and external accounts using Plaid, Inc.’s service. When you use the service to connect an account, you authorize SoFi to obtain account information from any external accounts as set forth in SoFi’s Terms of Use. Based on your consent SoFi will also automatically provide some financial data received from the credit bureau for your visibility, without the need of you connecting additional accounts. SoFi assumes no responsibility for the timeliness, accuracy, deletion, non-delivery or failure to store any user data, loss of user data, communications, or personalization settings. You shall confirm the accuracy of Plaid data through sources independent of SoFi. The credit score is a VantageScore® based on TransUnion® (the “Processing Agent”) data.

*Terms and conditions apply. This offer is only available to new SoFi users without existing SoFi accounts. It is non-transferable. One offer per person. To receive the rewards points offer, you must successfully complete setting up Credit Score Monitoring. Rewards points may only be redeemed towards active SoFi accounts, such as your SoFi Checking or Savings account, subject to program terms that may be found here: SoFi Member Rewards Terms and Conditions. SoFi reserves the right to modify or discontinue this offer at any time without notice.

Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

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All You Need to Know About Variable-Rate Certificates of Deposit (CD)?

All You Need to Know About Variable-Rate Certificates of Deposit (CD)

A variable-rate certificate of deposit (CD) is a financial product that locks up your money for a set period of time (or term) and has a fluctuating interest rate. This varying rate of return is what sets it apart from traditional CDs, which pay a fixed rate, meaning you know exactly how much money your money will earn.

When interest rates are high, a variable-rate CD can help pump up your returns, but the opposite holds true, too. Depending on your financial goals, style, and comfort level, a variable-rate CD may or may not be a good option for you.

What Is a Variable-Rate Certificate of Deposit?

A variable-rate certificate of deposit, or CD, is a financial product that you can purchase from a banking institution, broker, or credit union. All types of CDs are a savings account that have fixed investing terms. That means they hold your money for a certain amount of time, be it six months or several years.

You pick a term that suits you best. During that time, your money earns interest, but you are not supposed to withdraw any funds early or you are likely to be assessed a penalty fee. (No-penalty CDs are sometimes available but usually with lower interest rates.) When the term ends, your CD is said to have matured, and you may withdraw the funds plus interest or roll them over into a new CD. Usually the total amount of interest is also received at the end of the investment term.

More specifically:

•   Traditional CDs pay a consistent rate of interest that you are informed of at the start of the term.

•   With variable-rate CDs, however, the interest rate fluctuates throughout the term.

This means, you, the investor can potentially earn more on your deposit when interest rates go up. Or you could earn less if interest rates go down. Several market factors influence interest rates. These include the prime rate, treasury bills, a market index, and the consumer price index (CPI).

One last note: CDs are insured. Certificates of deposit are time deposits protected by the Federal Deposit Insurance Corporation (FDIC). If the bank holding the CD were to fail, you’d be insured up to $250,000 per depositor, per account ownership category (such as single, joint, or a trust account), per insured institution.

Get up to $300 when you bank with SoFi.

Open a SoFi Checking and Savings Account with direct deposit and get up to a $300 cash bonus. Plus, get up to 4.60% APY on your cash!


Special Considerations of a Variable-Rate CD

Here are a few key things to consider when looking into investing in variable-rate CDs. This type of CD is generally most profitable if purchased when interest rates are low, because it’s more likely that the interest rate will increase during the investment term. For this reason, there is a higher demand for these CDs when interest rates are low.

There are four main factors that influence interest rates. These are:

•   Consumer Price Index (CPI): The federal government uses the Consumer Price Index to calculate changes in the amount that consumers pay for certain products and services. Whatever the current CPI is can affect how interest rates fluctuate.

•   Market Index Levels: Another factor that affects interest rates is the performance of investment portfolios, such as major market indices. Some indices that are often analyzed include the S&P 500, the Dow Jones Industrial Average, and the Nasdaq Composite Index.

•   Prime Rate: The prime rate is the interest rate that banks charge customers who have the highest credit ratings. These customers are the least likely to default on loans, so they get the best interest rates.

•   Treasury Bill Yields: The U.S. Treasury sells Treasury bonds in order to raise money, and they also pay interest on those bonds. The interest rate associated with Treasury bonds depends on the amount and time period of the bond.

It’s worth noting that, during times of high inflation, CDs may not be your best option. If inflation surges, even a variable-rate CD may not be able to keep pace. At the end of your term, you may find that your investment has lost ground versus inflation.

Another factor to consider before you lock in on a variable-rate CD is the fee for early withdrawals. Some variable-rate CDs have higher fees than others. If there’s a good chance you may end up withdrawing funds early, before a CD’s maturity date, you should check those penalties and make sure they aren’t too steep.

💡 Quick Tip: Want to save more, spend smarter? Let your bank manage the basics. It’s surprisingly easy, and secure, when you open an online bank account.

Pros of a Variable-Rate CD

All CDs are known to be very safe investments since they are federally insured up to $250,000, as noted above. In addition to that security, there are several benefits to investing in variable-rate CDs.

High Yield on Investments

Variable-rate CDs are secure, insured accounts that can provide a higher rate of return than other types of savings accounts. For instance, when you buy a fixed-rate CD, you might miss out on the opportunity to earn a higher interest rate if the market ticks upward. Variable-rate CDs, however, can respond to market conditions. If you buy a variable-rate CD when interest rates are low, you can potentially earn more as rates increase.

Profitable When Interest Rates Are Low

When interest rates are low, demand for variable-rate CDs increases, as does the profit potential. That’s because it is more likely that interest rates will increase after you purchase one. The interest rate can tick upwards and earn you more money on your money.

Lower Withdrawal Fee

Generally, variable-rate CDs come with lower penalties on early withdrawals than other types of CDs.

Recommended: How Can I Buy a Bond?

Cons of a Variable-Rate CD

While there are several reasons variable-rate CDs make good investments, they do come with a few downsides to consider before you invest.

Low Interest Rates

Although a variable-rate CD provides the opportunity to snag higher interest rates, it also creates a significant risk of earning a lower rate if market rates go down. If you buy a variable-rate CD when interest rates are low with the hopes that they will increase, there is no guarantee that this will happen. This means they will continue to earn a low interest rate for some or all of the duration of the CD term. In this case, you may have lost out on the possibility of earning a higher return elsewhere.

Paying Extra for “Bump-Up” Feature

Although interest rates can increase or decrease with most variable-rate CDs, there are some that have a “bump-up” feature. This allows for a one-time rate boost (or possibly a few rate hikes) during the CD’s term, but you may well have to pay extra for this “bump-up.” This is because the initial interest rate is typically lower than it would be on a fixed-rate CD.

Inflation Can Outpace Your Rate and Wipe Away Profit

There is a chance that inflation will increase during the term of a variable-rate CD, as noted above. If this happens, inflation could end up being higher than the interest rate you’re earning. That could effectively cancel out your earnings.

Variable-Rate CD: Real World Example

All this talk of varying interest rates can be hard to get a handle on without a concrete example. So consider the following:

•   A CD that has a three-year term and a guaranteed repayment of the principal deposit.

•   The starting rate is 4.00%.

•   During the term of the investment, the rate drops from 4.00% down to 2.00%.

•   To determine the amount of interest you’d receive, you’d take the difference between the initial rate and the final rate, which is 2.00%.

•   So at the end of the term, the investor would receive their initial deposit plus 2.00% interest. That’s half what it was when you started.

Obviously, you, the CD account owner, would be happier if the reverse were true, which it could be!

What Happens if I Redeem a CD Before It Matures?

Most CDs have fees for early withdrawal; these typically involve losing interest that’s been earned and occasionally a bit of the principal. (Generally speaking, you don’t receive earned interest until a CD matures.)

However, some variable-rate CDs do offer early withdrawals with no penalties for fees. These CDs usually have a lower interest rate, so you are paying for this flexibility.

Recommended: How Can I Invest in CDs?

The Takeaway

CDs provide a safe place for your money to grow for a specific period of time. Most of them have fixed interest rates, but variable-rate ones are also often available. These can come with some risks. Time things right, and you could earn a healthy return on your investment. But if rates don’t head in a positive direction, you may not even be able to keep up with inflation.

CDs aren’t the only game in town for earning interest. Also consider the kind of interest you can earn from checking and savings accounts.

Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with direct deposit, you’ll get a competitive annual percentage yield (APY), pay zero account fees, and enjoy an array of rewards, such as access to the Allpoint Network of 55,000+ fee-free ATMs globally. Qualifying accounts can even access their paycheck up to two days early.


Better banking is here with SoFi, NerdWallet’s 2024 winner for Best Checking Account Overall.* Enjoy up to 4.60% APY on SoFi Checking and Savings.

FAQ

Are variable-rate CDs issued by the government?

Variable-rate CDs are not issued by the government, but the FDIC, an independent agency of the federal government, insures them up to $250,000 per depositor, per account ownership category, per insured institution.

What determines the rate on a variable-rate CD?

Several factors can affect the interest rate of variable-rate CDs. These include the prime rate, market indices, treasury bills, and the consumer price index.

Do CDs have fixed interest rates?

Many CDs have fixed interest rates, but variable-rate CDs have interest rates that fluctuate throughout their term. It’s up to you which type you invest in.


Photo credit: iStock/Vladimir Sukhachev

SoFi® Checking and Savings is offered through SoFi Bank, N.A. ©2023 SoFi Bank, N.A. All rights reserved. Member FDIC. Equal Housing Lender.
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SoFi members with direct deposit activity can earn 4.60% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. Direct Deposit means a recurring deposit of regular income to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government benefit payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Direct Deposit”) via the Automated Clearing House (“ACH”) Network during a 30-day Evaluation Period (as defined below). Deposits that are not from an employer or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, or are non-recurring in nature (e.g., IRS tax refunds), do not constitute Direct Deposit activity. There is no minimum Direct Deposit amount required to qualify for the stated interest rate.

As an alternative to direct deposit, SoFi members with Qualifying Deposits can earn 4.60% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Qualifying Deposits means one or more deposits that, in the aggregate, are equal to or greater than $5,000 to an account holder’s SoFi Checking and Savings account (“Qualifying Deposits”) during a 30-day Evaluation Period (as defined below). Qualifying Deposits only include those deposits from the following eligible sources: (i) ACH transfers, (ii) inbound wire transfers, (iii) peer-to-peer transfers (i.e., external transfers from PayPal, Venmo, etc. and internal peer-to-peer transfers from a SoFi account belonging to another account holder), (iv) check deposits, (v) instant funding to your SoFi Bank Debit Card, (vi) push payments to your SoFi Bank Debit Card, and (vii) cash deposits. Qualifying Deposits do not include: (i) transfers between an account holder’s Checking account, Savings account, and/or Vaults; (ii) interest payments; (iii) bonuses issued by SoFi Bank or its affiliates; or (iv) credits, reversals, and refunds from SoFi Bank, N.A. (“SoFi Bank”) or from a merchant.

SoFi Bank shall, in its sole discretion, assess each account holder’s Direct Deposit activity and Qualifying Deposits throughout each 30-Day Evaluation Period to determine the applicability of rates and may request additional documentation for verification of eligibility. The 30-Day Evaluation Period refers to the “Start Date” and “End Date” set forth on the APY Details page of your account, which comprises a period of 30 calendar days (the “30-Day Evaluation Period”). You can access the APY Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking > Savings > Current APY or (ii) Banking > Checking > Current APY. Upon receiving a Direct Deposit or $5,000 in Qualifying Deposits to your account, you will begin earning 4.60% APY on savings balances (including Vaults) and 0.50% on checking balances on or before the following calendar day. You will continue to earn these APYs for (i) the remainder of the current 30-Day Evaluation Period and through the end of the subsequent 30-Day Evaluation Period and (ii) any following 30-day Evaluation Periods during which SoFi Bank determines you to have Direct Deposit activity or $5,000 in Qualifying Deposits without interruption.

SoFi Bank reserves the right to grant a grace period to account holders following a change in Direct Deposit activity or Qualifying Deposits activity before adjusting rates. If SoFi Bank grants you a grace period, the dates for such grace period will be reflected on the APY Details page of your account. If SoFi Bank determines that you did not have Direct Deposit activity or $5,000 in Qualifying Deposits during the current 30-day Evaluation Period and, if applicable, the grace period, then you will begin earning the rates earned by account holders without either Direct Deposit or Qualifying Deposits until you have Direct Deposit activity or $5,000 in Qualifying Deposits in a subsequent 30-Day Evaluation Period. For the avoidance of doubt, an account holder with both Direct Deposit activity and Qualifying Deposits will earn the rates earned by account holders with Direct Deposit.

Members without either Direct Deposit activity or Qualifying Deposits, as determined by SoFi Bank, during a 30-Day Evaluation Period and, if applicable, the grace period, will earn 1.20% APY on savings balances (including Vaults) and 0.50% APY on checking balances.

Interest rates are variable and subject to change at any time. These rates are current as of 10/24/2023. There is no minimum balance requirement. Additional information can be found at https://www.sofi.com/legal/banking-rate-sheet.


Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

*Awards or rankings from NerdWallet are not indicative of future success or results. This award and its ratings are independently determined and awarded by their respective publications.

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