The wisdom to make the right choices for your future

If you plan to retire in the next couple of years, you should ensure you are maximizing your retirement contributions. There are several reasons you should do this. One of them is tax savings. By contributing to a qualified retirement plan, you can save money on your taxes. This includes 401k, IRA, and 403(b) plans. Limits on 401(k) contributions To maximize your retirement contributions, you’ll need to determine what limits on 401(k) contributions apply to you. The IRS sets limits designed to ensure that the amount of money you contribute is in line with inflation. If you don’t take advantage of the limit, you may have to pay taxes on the total amount a few years down the road. Although the limit isn’t specific to 401(k) plans, it is essential to know that they are allowed in most IRAs. Depending on your employer, you can add up to $61,000 to your IRA. However, there’s a good chance you won’t get all of your catch-up contributions in before your plan ends. Similarly, if you have more than one 401(k) plan, you’ll need to pay close attention to how much you can defer each month. Limits on 403(b) contributions When you have a 403(b) retirement plan, you may save more money than you’d save with a 401(k) plan. The difference is that 403(b) plans are for nonprofits, while 401(k) plans are generally employer-sponsored. While both are good retirement savings options, the limits on each are different. In the case of a 403(b) plan, the annual limits are set each year. This is to prevent high-income workers from overusing these plans. The contribution limit on a traditional 403(b) is $22,500. If you contribute to a Roth 403(b), you can defer up to $15,000 in taxable contributions. For a Roth 403(b), you also have the option of contributing after-tax money. There are limits on both employee and employer contributions. These limits vary by age. Workers under 50 can contribute up to $61,000. People who are 50 or older can contribute up to $67,500. Catch-up contributions to IRAs If you are 50 years old or older, you have many options to help you save for your retirement. These include traditional IRAs, SIMPLE IRAs, Roth IRAs, and 403(b)s. The best option for you may depend on your circumstances. Depending on your income, catch-up contributions can add up. A $1,000 catch-up contribution can provide you with an extra $44,000 in retirement over the next twenty years. You can make these contributions in many different ways. Depending on your account type, your catch-up contribution may be available at any time during the calendar year. To determine if you are eligible, check with your benefits department. Besides letting you add more money to your retirement savings, catch-up contributions can also shield your investment from income tax liability. This can be especially helpful if you save more to meet your goals. Tax advantages of qualified retirement plans The tax benefits of a qualified retirement plan are a powerful tool to help you save money. These plans provide tax advantages for both employers and employees. A qualified plan is a plan that meets specific requirements as set by the IRS Code. Generally, a qualified plan must comply with the Employee Retirement Income Security Act (ERISA). Qualified plans allow you to defer taxes on earnings. You can also make contributions to your retirement plan on a pre-tax basis. However, you may have to pay income tax on these contributions if you withdraw them before retirement. Depending on your type of plan, you can contribute more. You can also invest your plan assets in higher-return assets. This allows you to earn a better rate of return, which will ultimately help you grow your money tax-free. Using a 401k retirement calculator A 401k retirement calculator can help determine how much you need to save. It considers your expected annual salary, age, and other factors. You can also input planned annual contributions and catch-up contributions. The result is a bar graph showing the cumulative amount of your account. Hovering over the bar shows the breakdown of your balance and how it grows over time. The 401k Retirement Calculator does not give you a guaranteed rate of return, but it is an excellent place to start. If you do not have an accurate figure, you can use the results to see how increasing your yearly contributions will improve your retirement outlook. Using the 401k retirement calculator to estimate your retirement savings is a smart way to take control of your future. Using wisely can help you determine how much you need to save for retirement, how much you need to invest, and how to stretch out your distributions.

Do you want to avoid juggling multiple retirement savings accounts and finding it challenging to keep track of your investments? Consolidating your retirement accounts can be the solution you’ve been searching for. By merging your various accounts into a single, well-structured plan, you can simplify your financial life and pave the way for a more […] The post Retirement Savings: The Power of Consolidating Your Accounts appeared first on Skip West.

One day you’re celebrating your first day at a new job, and the next thing you know, toasts are being raised at your retirement party. Taking action at these important milestones can help ensure your post-work life is more relaxing than taxing. Savings are essential to a successful retirement. Many experts recommend saving at least […] The post Retirement Countdown Milestones appeared first on Skip West.

As your clients get closer to retirement, it’s important to keep track of key retirement milestones. These milestones will help you stay on top of your clients’ planning and ensure they aren’t putting unnecessary strain on their resources. These milestones also show that you care about your client’s retirement life holistically. That’s an important part […] The post Key Retirement Milestones for Your Clients appeared first on Skip West.

Creating a budget can help you stay on track and make good financial decisions. It also helps you to avoid debt. Start by examining your income and expenses for a month. This will give you a clearer picture of your spending habits and show you where you can cut back. Needs If you’re having a […] The post How to Balance Your Income and Expenses appeared first on Skip West.

Retirement is a major milestone in life that everyone dreams of achieving. However, to make the most of your retirement, you need to start planning early. Retirement planning involves making financial and lifestyle decisions that will determine the quality of your life after you retire. In this article, we’ll cover the basics of retirement planning, […] The post Retirement planning: The basics appeared first on Skip West.

One of the biggest challenges of retirement planning is the number of different accounts that you might have. Many people have multiple employer-sponsored retirement plans and individual retirement accounts (IRAs). Consolidating all of your retirement accounts into a single IRA may simplify investment management, reduce fees, and help you implement tax-efficient strategies. But it’s important […] The post Benefits of Consolidating Retirement Accounts appeared first on Skip West.

If you plan to retire in the next couple of years, you should ensure you are maximizing your retirement contributions. There are several reasons you should do this. One of them is tax savings. By contributing to a qualified retirement plan, you can save money on your taxes. This includes 401k, IRA, and 403(b) plans. […] The post Maximize Retirement Contributions appeared first on Skip West.

Planning for retirement is an essential aspect of financial stability and security. Understanding retirement accounts and how they function is crucial for individuals aiming to build a nest egg for their golden years. With various retirement account options available, it’s essential to comprehend the differences, benefits, and considerations associated with each. In this comprehensive guide, […] The post The Different Types of Retirement Accounts and How They Work appeared first on Skip West.

Most employers offer 401k plans as a way for their employees to save for retirement. When you change jobs, you may need to decide what to do with your 401k. The decision depends on several factors, including what you value in a retirement account and what your current employer offers. Leave it where it is […] The post What Should You Do With Your 401k When You Change Jobs? appeared first on Skip West.

Income from retirement savings, such as IRAs, 401(k)s, and other accounts, is a critical component of your overall retirement income plan. It can help ensure your spending stays in line with inflation and provide a comfortable standard of living during retirement. As you save for retirement, keep in mind that income from these accounts may […] The post Income From Retirement Savings appeared first on Skip West.

Life insurance is a vital tool for protecting your loved ones' financial well-being in the event of your passing. When considering life insurance, you may come across the options of joint life insurance and single life insurance. Understanding the differences between these two types of coverage is crucial in making an informed decision. In this blog post, we will explore the contrasts between joint life insurance and single life insurance, helping you determine which option suits your unique needs.