Five ways to boost your retirement savings

Ways to save for retirementHow many times during 2018 did you contemplate whether or not you are saving enough for retirement? If at least once, then you should review whether you’re making the most of the opportunities available to you.

As part of the Wealth Dimensions Intentional Wealth planning process, our firm works with clients at the start of each year to review the retirement savings strategies they have in place.

Here’s the five-step approach you can expect us to take to help you boost your retirement savings:

#1 Maximize your 401(k): As you likely know, a traditional 401(k) allows you to contribute pretax dollars from your paycheck into a company-sponsored retirement account. A 401(k) can provide meaningful tax advantages, particularly if you’re in the higher tax brackets during the year of the contribution. What’s more, this money is shielded from taxes while it remains in the account. Essentially, what you earn through income and appreciation is tax-deferred.

If your employer offers a Roth 401(k), which uses after-tax dollars for contributions, we will review with you to determine whether this vehicle is appropriate for you and how much to contribute.

#2 Maximize your company match: Don’t overlook the opportunity to receive “free” money contributed to your retirement account. It’s important to review your current employer contribution rates to ensure you’re contributing enough to the 401(k) plan to take full advantage of the match. We help clients determine the appropriate and allowable contribution levels so that they can maximize their company’s match.

#3 Contribute to a Roth IRA: This is another attractive savings vehicle to consider because contributions can grow tax-free even although they are not deductible from your income. Since income limits apply for eligibility, we will help you determine whether you qualify for a Roth IRA.

#4 Contribute to a traditional IRA: Not only do you receive the immediate tax break for traditional IRA contributions, the income and appreciation earned in the account is tax-deferred until you begin taking distributions. However, there are income eligibility limits to take full advantage of this type of account so leveraging this vehicle truly depends on your unique financial situation and mix of available retirement savings options available to you.

#5 Capitalizing on catch-up contributions: If you are 50 years old or older during the 2019 calendar year, then you can contribute an additional $1,000 over the 2019 contribution limit of $6,000, which the IRS just increased for 2019. We always like to remind clients that there are some tangible benefits of reaching the 50 year-old milestone!

In addition to reviewing your retirement strategy, we always consider all of your goals to ensure you’re saving enough and appropriately invested to achieve what matters most to you in your life.

 

 

For informational purposes only. Not intended as legal or investment advice or a recommendation of any particular security or strategy. Information prepared from third-party sources is believed to be reliable though its accuracy is not guaranteed. Opinions expressed in this commentary reflect subjective judgments of the author based on conditions at the time of writing and are subject to change without notice. For more information about Wealth Dimensions, including our Form ADV Part 2A Brochure, please visit https://adviserinfo.sec.gov or contact us at 513-554-6000.