Personal Finance

TL;DR: index funds and tax-protected accounts.

Index funds because none of us (including the professionals who study them all day long) know enough about individual companies and the future of the economy to pick winners consistently. Investing in "everything" averages out the winners and losers and gives you the natural growth of human activity.

Tax protected accounts because you'll make withdrawals at a time when your income is (presumably) lower, and deferring income to that time means deferring taxes to the lower tax bracket. In the US, tax protected accounts have special purposes: education, healthcare, retirement.

At 48, education is probably only relevant if you want to pay for kids' college, and that's what [https://www.irs.gov/taxtopics/tc313](529 plans) are for.

You are definitely coming to the point in life where, regardless of your general health, you will begin to incur healthcare costs. In the US, that's an incredibly complex topic, but one aspect to be aware is [https://www.healthcare.gov/glossary/health-savings-account-hsa/](Health Savings Account). You have to be on 'high deductible' insurance to qualify for these, so probably not empoyer-sponsored insurance, but if you're self-insuring through the marketplace, many of the lowest-premium plans qualify. HSA will let you save around $4000/year tax-deductible and tax-free, with the restriction that it can only be used for healthcare costs (not insurance premiums) until age 65, at which point the money becomes available for any purpose, still tax-free.

Retirement is probably you main long-term concern. If your employer offers a 401(k), you can put up to $22k in that every year. If your income is $42k, you pay $3200 in OASDI and around $1500 in Federal income tax. Putting $20k in a 401(k) will reduce your declarable income to $22k, your OASDI tax to $1700 and Federal tax to $0, effectively giving you an extra $3000/year to spend/save. 401(k) money is fully taxable when withdrawn, but if you have to withdraw $18k/year (1500/month) after retirement, that is still below the Federal tax threshold (depending on your social security benefits).

For sure, if your employer offers any kind of match to your 401(k) contributions, contribute at least enough to get all of that match. It's literally free money.

Non-employer retirement accounts are IRAs, either Traditional (tax deductible contributions, tax deferred withdrawals) or Roth (taxable contributions, tax free withdrawals), with $6500/year contribution limits. Roth makes retirement planning very easy, because however much you have saved is what you can spend, but they also mean paying taxes on that money today. In your case, at a marginal tax rate of (7.65+12) = 19.65%, that means $1280/year, where, as with the 401(k), it looks like your after-retirement tax rate will be around 0%, anyway. For most people who qualify, traditional IRA is the lower cost solution, even though it increases the after-retirement tax cost.

Finally, I'm not a pro, this is all just information I've picked up. If you're really unsure, it might be worth your peace of mind to find a fee-only financial advisor and pay them a few hundred dollars for a consultation. Think of it like therapy for your financial mental health. They'll give you completely boiler-plate advice, but they know all this stuff inside and out, and should be able to set you on a good path in just one meeting. Don't sign up for an annual contract.