Retirement is one of the biggest milestones in your life, yet so many don’t pay much attention to retirement accounts. It is not unusual to hear clients say they toss aside their 401(k) statements because they feel like they can’t do anything about it. That couldn’t be further from the truth. Working with wealth management and accounting professionals can help you understand your retirement accounts and create a financial plan that is in line with your retirement goals.
Below are items to consider with both your MRPR CPA and the Avantax Planning PartnersSM financial planning consultant.
Understand the limit for your 401(k) plan, which changes annually. If this is significantly higher than the amount you are contributing today, consider increasing your contributions a few times during the year if your plan allows it. That way, the difference in your paycheck may not be so noticeable.
If you are currently in a lower tax bracket, consider taking advantage of your plan’s Roth feature rather than selecting pre-tax deductions. A Roth feature allows you to grow your savings over your working years and avoid taxes on your savings later.
Make sure you are contributing enough to your plan to take advantage of your company’s match. This is extra money that will grow over time to help you build up your account. Don’t leave this money on the table. It is an added benefit that your employer provides as an incentive for you to save for your retirement.
Some retirement plans offer the opportunity to take a loan. Resist the urge to borrow from your future. In doing so, you’ll lose the effect of compounding interest with the unpaid loan balance.
Review the investments you are putting into your retirement and ask yourself:
Do they provide me with the right mix of stocks and bonds to help with continuous growth over my working years?
Some plans automatically rebalance to keep your selected mix of investments in line, but others don’t. You may need to adjust your investments to keep them aligned with your financial goals and risk tolerance.
Take some time and do an annual check-up with your retirement plans and make sure you are set up for the growth you need to achieve your retirement goals.
Talk to your trusted accounting partner to start a conversation with our Investment Advisor Representative who can help determine the best plan for you. Investment advisory services offered through Avantax Planning PartnerSM .