Contributing $6,500-$7,500 a year more to the tax-deferred growth of your qualified retirement accounts could translate to an extra $250,000 – $300,000 in savings over 20 years. That’s assuming a modest 6% annualized return, and it doesn’t even take into consideration the tax savings that often come with retirement savings.
Simple, so long as you are 50 years old already, or turning 50 this year.
Catch-up contributions are available at age 50, so if you are hitting that milestone this year, review your current retirement savings options to see where you can start to save more. Even if you aren’t contributing to an employer-sponsored plan, you can still make catch-up contributions in an IRA.
Non-working spouses can also make these additional contributions, so long as one spouse is working.
And, there are strategies for maxing out retirement plan contributions even if you are self-employed.
Interested in an overview of your options? Let’s Talk.
Ed is Director of Financial Planning of Heritage Financial Services, where he creates and shapes best practices in financial planning for the firm. In this role, he mentors the wealth advisors and consults on unusual or highly complicated client cases.