Ep 23: Tax Planning Tips to Maximize Your Retirement Accounts

Show Notes

In last week’s episode we talked about year-end tax strategies. Today, we’re breaking that down even further and focusing on how to maximize your retirement accounts. You need to put a lot of these strategies in place before Dec. 31 if you want to get the benefits.

First, you need to know what types of accounts are available to you and which ones you can contribute to based on your income. Some, like a 401k, you can contribute to it. But an IRA or Roth IRA, for example, is based on your income and could be phased out or limited.

One of the things you really want to be thinking about when it comes to your life and your finances is tax diversification. That means, where are you saving your funds? You want to look at your tax bracket and where you want to save today and in future years.

If you have a 401k and are under the age of 50, you have the ability to contribute up to $19,500 a year into that account. If you’re over 50, they allow catch-up contributions for a total of $26,000 a year.

You can also save into an IRA or Roth IRA $6,000 a year. If you’re over 50, you can save $7,000.

If you’re self-employed, you have options as well. You can look at a SEP (Simplified Employee Pension Plan) or a solo 401k or solo Roth 401k plan. Each structure has its benefits.