In 2024, employees participating in 401(k) plans can contribute up to $23,000 per year.
In addition, when taking account for employer and employee contributions, the limit stands at $69,000 which increases the ability for workers to set aside even more. If your 401(k) plan accepts it, and as long as the salary is beyond the threshold, this means employees can go beyond the $23,000 limit and up to the $69,000 limit.
The Roth IRA
Using a Roth IRA can increase savings for those who qualify. Compared to future rates, current rates provide high potential savings. This means that Roth savings can, in turn, be more valuable.
For those who don’t qualify for a Roth IRA, the traditional IRA makes sense for most people. Some tax rates decrease when you are retired. Talking to your financial advisor can help establish the right plan for you.
401(k) Super Savers
Super Savers are those who make contributions totaling at least 15% of their pay, or 90% of their total allowable contribution. A majority of people don’t take the opportunity to max out their contribution limits, but if budget allows for it, it might be a great move to make.
To acheive Super Saver status, it will take a lot of discipline and planning. Doing this can help increase opportunity to reach your retirement goals that you have always dreamed about. Taking some sacrifices will make your outcome worth it. If this seems like the way to go here are some steps to find your way:
Take it Step by Step
Everything in this world has started from small steps, so don’t let a large goal scare you and seem out of reach. If you set aside whatever you can at the beginning, there is always room for small improvement.
Have set dates that you plan to increase your contributions. Some plans provide options to make the increases automatic, so you don’t even have to remember to do it yourself.
Use Smart Budgeting Tactics
Find ways to move money around in your budget to accommodate for the increased contributions. Living a life slightly below your means now can help increase your goals for your future.
Account for Employer Matching
Some Employers provide a matching opportunity if you contribute up to a certain amount. Don’t be afraid to hit this mark, as it will help you save more money in the long run.
For other blog posts, and financial advising information, visit https://www.pharrcpa.com/