Week 31: Save More, Tactic 8

What can you do this week?

• Look at all the retirement accounts you contribute to and know the maximums. (This piece only uses 401k and Roth IRAs as an example)

• Based upon your plan, contributing the maximum may or may not matter.

• If it does matter, consider if you can meet the maximum contribution this year.

• Get tactical on how you can get it done if so.

• Don’t forget your taxable investment account is a great supplement if you need to save above the maximum in retirement plans.

What Are Contribution Limits?

• Most retirement plans provide some form of tax benefit either today or tomorrow.

• The IRS does not let everyone fully take advantage of these plans so there are income limits and contribution amount limits.

  
  

  How Do You Contribute?

• Employer plan contributions like from 401ks are deducted from your paychecks before you see it.

• Getting the match from an employer is a key benefit to not miss here.

• Having an individual retirement account means you can send funds from your bank at any interval from January to April of the following year in order to max out contributions.

• You manage contributions and you also monitor limits unless your advisor helps you.

  

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Do Limits Apply To Me?

• Depending on your plan and funding goals, maxing out retirement plans may be more than enough or not enough for your plan.

Make Maximum Contributions Digestible

• Making annual contribution limit savings goals into monthly goals can make maxing out budget friendly.

• Especially understanding that IRA deadlines are not calendar-based, can provide you flexibility.

After You’ve Maxed Out Plans

• After fully funding retirement accounts, non-qualified/taxable accounts have no limits.

• That freedom is great but many struggle with creating a new savings structure and having discipline when no one withholds it from their check.

• Weekly savings goals can help you not spend frivolously today and ensure security for your future.

• Dividing an annual goal by 52 weeks like below can make these supplementary savings goals more manageable.

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