On the Pacific coast of southern California, 30 km north of the border with Mexico, approx. 1.4 million people call San Diego County home. Known for its year-round good weather and beautiful beaches, San Diego is the second largest city in California (with Los Angeles first).
How San Diego attracts talent and investment
San Diego’s GDP has been steadily rising since 2001, with dips around the 2008 financial crisis and in response to the impact of the Covid-19 pandemic in 2020.
In terms of foreign direct investment, San Diego saw a total inflow of approximately $3 billion in 2020, according to the World Trade Center in San Diego. Furthermore, the recovery from Covid-19 in terms of employment has been above average.
As of September 2022, San Diego had an unemployment rate of 3.1%, which was below California’s 3.7% and the United States as a whole, which was 3.3%.
Furthermore, the leisure and hospitality sector had the greatest growth in employment between 2021 and September 2022, increasing by 13.4%.
London explains that there has been a lot of urbanization and growth in San Diego because of its location and relatively low cost of living. “San Diego remains the least expensive metropolitan area on the West Coast, with the possible exception of Portland,” he says.
Compared to areas like Silicon Valley, Los Angeles and Orange County, London says the cost of living is more affordable in San Diego, which in turn attracts talent.
However, London also highlights an obstacle that still needs to be overcome in the city. “Our median income is not that high,” he says. “It’s pretty average, and while our house prices aren’t the highest in the country, they are high. The gap between median income and median home price is wider in San Diego than anywhere else in the United States.”
London explains that for those working in higher paying sectors such as technology and life sciences, housing is cheaper than if they were to work in the previously mentioned places. “San Diego is in a perpetual state of imbalance between supply and demand in the housing sector,” he says. “Depending on how you calculate housing demand, we never seem to catch up.”
San Diego’s military legacy
Historically, San Diego has been synonymous with the military. In 2022, the city marked a century of hosting a key US Navy base. The military makes up about a quarter of San Diego’s economy with the city home to the largest concentration of military assets in the world, according to the San Diego World Trade Center.
Coleman explains that this has kept San Diego prominent in the federal spotlight. “The procurement contracts that come from the federal government to help the military — with things like satellites in wireless communications — over time have really expanded,” he says. “We have some of the most important, forward-looking, strategic work for the future of warfare, from the seafloor to space, happening in San Diego.”
The federal influx of dollars into military-based programs has cultivated robust connections between universities, research institutions and the military in San Diego. Coleman believes that this has built a strong innovative and entrepreneurial culture in the city, which he describes as “patent intensive”.
Innovation helps San Diego investment profile
When it comes to innovation, the San Diego headquarters of Qualcomm – a multinational company that designs and manufactures semiconductors and wireless telecommunications products – showcases the city’s strengths, having been responsible for some 264,000 patents globally, more than 62% of which are currently active.
London estimates that Qualcomm is the largest employer in San Diego with approximately 12,000 employees. As a result of their presence, other innovative companies such as Apple and Amazon have followed suit and chosen San Diego.
“Last year, Amazon built what I think is their largest distribution facility, at least in North America, here in San Diego,” London says. “We have an alphabet soup of technology and life sciences companies.”
London credits the University of California, the Salk Institute (a research center for biological studies) and Scripps Research (a medical non-profit research facility) with strengthening the technology and life sciences sectors. In 2020, life sciences accounted for approximately 73% of inward regional investment.
The University of California at San Diego also holds a large number of patents and has an active patent and patent licensing program. It also receives a high level of National Institute of Health funding.
“San Diego is one of the largest exporters of R&D services,” explains Coleman. “San Diego was number two in the country for defense procurement. That led to a lot of investment going to private companies in the defense sector, and a lot of that went to R&D.”
Tourism remains key for city’s economy
Aside from its multicultural charm and military history, San Diego continues to be a major global tourist destination.
Through attractions such as the San Diego Zoo, the vast Balboa Park, the USS Midway naval museum, Seaport Village (a port center for shopping and dining) and the historic Gaslamp Quarter, San Diego brought in approximately 35 million visitors in the year before Covid-19.
Furthermore, San Diego Comic-Con—an annual multi-genre comic and entertainment convention—attracts approximately 135,000 fans to the city and generates an estimated $165 million in spending.
While tourism has undoubtedly been a major economic driver for San Diego, London believes there are still issues that need to be addressed. “People in tourism jobs in San Diego are historically the lowest paid people here, but the unions are catching up,” he says.
A key problem is that a large proportion of workers commute from across the Mexican border because they cannot afford to both live and work in San Diego. London explains that this poses a threat to San Diego’s tourism sector.
“Without Tijuana [a border city in Mexico], I don’t know how our tourism industry would be able to be supported,” he says. “It’s very expensive for those frontline workers. It is a great conundrum that our politicians and our thought leaders in this city have not grappled with as much as they should.”
While concerns about the border persist, San Diego’s tourism industry has seen a strong recovery from Covid-19. Hotel revenue generated by tourists – nearly $1.9 billion – is projected to surpass 2019 figures by nearly 20% by the end of 2022.
San Diego’s climate and history mean it will likely be able to count on a thriving tourism industry for the foreseeable future, but the city has many strings to its bow. Quality of life is a key driver for foreign investors during the selection process, and San Diego excels in this area, but the city’s reputation for innovation means investment levels are likely to remain robust for some time to come.
Driving growth: the American automotive market in 2022
After a tough 2020, the US auto industry is now in recovery mode. But as demand for hybrid and electric vehicles increases, manufacturers, already facing tough competition both at home and abroad, have a new set of challenges to deal with.
From securing the components and resources they need to compete in the race to electrification to upskilling their workforce, the U.S. auto industry must brace itself for an ever-evolving landscape.
What is Roth in investing?
This article examines the key challenges and opportunities facing the market, looking at the current leading players, the latest deals and valuations, the outlook for electric cars, and the steps manufacturers can take to make the most of this changing market.
Is there anything better than a Roth IRA?
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What should I invest in after Roth IRA?
A Roth IRA is an individual retirement account that you contribute to after taxes. Although there are no tax benefits for the current year, your contributions and earnings can grow tax-free and you can withdraw them tax- and duty-free after age 59½ and when the account has been open for five years.
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- Key Takeaways A Roth IRA or 401(k) makes the most sense if you are confident of having a higher income in retirement than you do now. If you expect your income (and tax rate) to be higher now and lower in retirement, a traditional IRA or 401(k) is probably your best bet.
- What can I do instead of a Roth IRA? Maximizing contributions to a traditional 401(k) is a good place to start. Such accounts have no income phase-out limits, so you can usually contribute the lesser of your income or $20,500 (plus an additional $6,500 if you’re 50 or older).
- Where to invest after you’ve maxed out your Roth IRA
What else can I do besides a Roth IRA?
Invest in a spousal IRA.
What happens after you max out your Roth IRA?
Top of 401(k) or 403(b)
Is there anything better than an IRA?
Make after-tax contributions to your company plan.
What is a disadvantage of having an IRA?
Invest in taxable non-retirement accounts.
Is a traditional IRA ever worth it?
You can invest as little or as much as you want in a taxable account and put your money into stocks, bonds, mutual funds, exchange-traded funds (ETFs) and real estate investment trusts (REITs), among other options. Just remember that income from these investments is subject to capital gains tax.
Are IRAs still a good idea?
You have options! From looking into employer-sponsored plans or setting up a solo 401k to investing in real estate or developing a taxable brokerage, there are plenty of smart money moves to make after your Roth IRA is maxed out for the year.
Is Roth IRA the best choice?
The 401(k) is simply objectively better. The employer-sponsored plan allows you to add much more to your retirement savings than an IRA — $20,500 compared to $6,000 in 2022. Plus, if you’re over 50, you get a larger catch-up contribution with the 401(k) — $6,500 compared to $1,000 in IRA.
At what age can you no longer open an IRA?
IRAs have low annual contribution limits One disadvantage of using IRAs to save for retirement is that the annual contribution limits are relatively low. In 2022, you can contribute up to $20,500 to a 401(k) plan, but you can only contribute $6,000 to an IRA (the limit goes up to $7,000 if you’re at least 50 years old).
A traditional IRA can be a great way to turbocharge your nest egg by staving off taxes while you build your savings. You now get tax relief when you make tax-deductible contributions. In the future, when you take money out of your IRA, you’ll pay taxes at your ordinary income rate.
At what age can I no longer contribute to a 401k?
Individual Retirement Accounts (IRAs) offer investors a fantastic opportunity to save taxes. Pay for your future self by investing in an IRA, and you can also reduce your income taxes. Smart retirement investors, however, know an even better strategy for minimizing taxes: Use a Roth IRA.
Can I open an IRA if I’m retired?
In general, if you think you’ll be in a higher tax bracket when you retire, a Roth IRA may be the better choice. You pay tax now, at a lower rate, and withdraw funds tax-free in retirement when you are in a higher tax bracket.
How much can a retired person contribute to an IRA?
IRA Contributions After Age 70½ For 2020 and later, there is no age limit for making regular contributions to traditional or Roth IRAs. For 2019, if you’re 70 ½ or older, you can’t make a regular contribution to a traditional IRA.
At what age can you no longer open an IRA?
Can You Open an IRA at Age 72? Roth IRA. You can contribute at any age if you (or your spouse if you file jointly) have taxable compensation and your modified adjusted gross income is below certain amounts (see also the 2022 and 2023 limits).
Can you open an IRA when you are retired?
Pension scheme RMDs The year you turn 72, the tax system pulls the plug on your pension accounts in the form of RMDs.
What is the downside to a Roth IRA?
Can I contribute to a Roth IRA if I’m retired? Yes, you can, but only if you have compensation income. Roth IRAs were designed to help people save for retirement with the benefit of tax-free growth. So they’re really most useful as a way to invest for growth in the years before you retire.
IRA contribution limits are the same during retirement as they are for the rest of your life. You can contribute up to 100 percent of your earned income or $6,000 (in 2022) for people under 50, whichever is less. Those age 50 or older can contribute an additional $1,000 as a catch-up contribution for a total of $7,000.
- Traditional IRAs: Although previous laws stopped traditional IRA contributions at age 70.5, you can now contribute at any age. However, required minimum distribution (RMD) rules still apply at 70.5 or 72, depending on when you were born.
- Important takeaways. There is no age limit for contributions to either Roth or Individual Retirement Accounts (IRAs). You can now contribute to traditional IRAs beyond the previous age limit of 70½, thanks to the Setting Every Community Up for Retirement Enhancement (SECURE) Act passed in 2019.
- Key Takeaways One key downside: Roth IRA contributions are made with after-tax money, meaning there’s no tax deduction in the year of contribution. This five-year rule can make Roths less favorable to open if you’re already in late middle age.
- What are the disadvantages of the Roth IRA? While Roth IRAs offer several advantages, they have some potential disadvantages:
What happens to Roth IRA if market crashes?
Contributions are not tax deductible. …
Should I contribute to Roth IRA if market down?
Limits based on income. …
Is a Roth IRA good during a recession?
Restrictions on withdrawal of income. …
What happens to Roth IRA when stock market crashes?
Some retirees may not want to take advantage of it.
Is Roth IRA even worth it?
In the event of a crash, the value of your investments will decrease. But it is important to remember that this is only temporary. The stock market has always recovered from crashes in the past, and it is likely to do so again.
At what age does a Roth IRA not make sense?
A downturn in the market allows you to buy your favorite funds at a cheaper price. If your financial situation allows you to continue contributing to a Roth IRA, don’t let the markets scare you away. This may be the best time to contribute to the dream life you want in retirement.
Are there downsides to a Roth IRA?
You should stash money in a Roth IRA even if the stock market plummets — just make sure you have your financial house in order. You won’t miss out on future Roth IRA growth and earnings that can be tax-free during retirement.
Is a Roth IRA worth it in 2022?
Roth IRA Conversions When Stocks Are Down You owe taxes on any funds you convert, so a decline in the stock market can make a conversion more attractive, since you pay taxes on less money. For example, say your traditional IRA was worth $100,000 and it drops to $60,000 when the overall market declines.
At what age does a Roth IRA not make sense?
Benefits of a Roth IRA One of the best ways to save for retirement is with a Roth IRA. These tax-deferred accounts offer many advantages: You don’t get a tax break up front (as you do with traditional IRAs), but your contributions and earnings grow tax-free. Withdrawals during retirement are tax-free.
Why do people not want Roth IRA?
If your age is over 50, it probably doesn’t make sense to convert because there isn’t enough time for the Roth IRA growth to exceed the tax cost today.
At what age should you stop contributing to a Roth IRA?
Roth IRAs may seem ideal, but they have drawbacks, including the lack of an immediate tax break and a low maximum contribution.
Are Roth IRA good for seniors?
If you want access to tax-free withdrawals in retirement, don’t miss your chance to contribute to a Roth IRA today. Many retirement savers love Roth IRAs because you can accumulate tax-free income and profits during retirement.
