As the calendar year turns, it is time to update your retirement contributions – and paying attention to this every year is important for several reasons:
Tax Planning: Contribution limits to retirement accounts are often tied to tax laws. Staying informed about changes helps you plan your contributions in a tax-efficient manner. Contributing the maximum allowable amount can have tax advantages, such as reducing your taxable income.
Investment Strategy: Some retirement accounts offer a range of investment options. Changes in contribution limits might influence your investment strategy, particularly if you're aiming to maximize your contributions within specific investment vehicles.
Retirement Lifestyle: The amount you contribute to your retirement accounts directly affects the income you'll have during retirement. Being aware of changes allows you to make adjustments to your contributions, ensuring that you are on track to maintain your desired lifestyle in retirement.
Most of these will need to be done directly through your employer. Here are the key numbers to be aware of.
If you have questions about your current contributions, now is the time to make changes. We’re here to help.