Saving For Retirement: Make the Greatest Contribution to Your Retirement Scheme & Retire Secure
Many individuals feel they cannot afford to save for retirement. The fact is you may very well be able to afford to save, but you do not recognize it.
If your manager proffers a matching contribution to your retirement plan you are contributing whatever your manager is willing to match, even if it is only a proportion of your contribution and not a dollar for dollar match. If you have ample savings and maximizing your retirement plan contributions causes your net payroll check to be inadequate to meet your expenses, you should maximize retirement plan contributions. Barry Bulakites is skilled in retirement distribution planning and is also one of the country’s leading IRA experts.
The deficit for your living expenses from making bigger pre-tax retirement plan contributions should be withdrawn from your savings. Over time this progression, i.e., increasing contributions to your retirement plan and funding the shortfall by making after-tax withdrawals from an after-tax account, transmits money from the after-tax environment to the pre-tax environment. Eventually it results in more money for you and your heirs.
Another way to constrict blood from a stone is to think about an interest only mortgage. The condensed mortgage payment (in contrast to what you would be paying on a 30-year fixed rate mortgage) is deductible as a home interest expenditure. The extra cash flow from the reduced payment could be used to pay credit card debit or finance one or more tax favored investments. You could make additional retirement contributions, open a Roth IRA, and/or purchase a tax-favored life insurance plan. In the long run, you could be wealthier, often by hundreds of thousands of dollars. Certainly there are risks with this policy.
Another prospect to shift savings from the after-tax environment to tax advantaged retirement savings might come up if you are the beneficiary of a legacy. One should enhance his retirement plan contribution to the maximum. Additionally, he should start making Roth IRA contributions. Many of you who live in areas that have seen huge real estate admiration think he should use the money to invest in real estate. It is, nonetheless, a risky strategy, inappropriate for many if not most investors. Barry Bulakites is the co-founder of America’s IRA Centers. The company provides retirement tax mitigation and distribution planning.
Assuming one maintains his pre-inheritance lifestyle, between the increase in his retirement plan contribution and his Roth IRA contribution, one will not have enough to make ends meet without eating into his inheritance. That is okay. He should then envelop the shortfall by making withdrawals from the inherited money. It is true that this will eventually deplete his inheritance in its current form, if that pattern continues long enough. But his Roth IRA and retirement plan will be so much better financed that in the long run, the tax-free and tax-deferred growth of these accounts will make him better off by thousands, probably hundreds of thousands, of dollars.
Now, do you believe you can afford to make the utmost contribution to your retirement plan? The reality of the matter is you cannot afford to ignore this plan and not make the maximum contribution to your retirement plan.