It’s difficult to know which retirement savings accounts and plans to contribute to in order to maximize their benefits. There are a lot of options out there and each has a unique level of utility . Situations are different for everyone, but this article can provide a basic guideline as a starting point.
The first place you’ll want to stash your savings will by your employer provided 401(k) plan. Contributing up to the match limit is ideal if your company offers matching. This ensures that you take advantage of all the money your employer essentially gives you for free which can then continue to grow as well. That extra 3-6% on your money makes a huge impact as the years go on!
Anything above the match limit would be best put into your Roth IRA account. You can put up to $6,000 (max in 2019) a year into this account and make withdrawals tax free later. This account type provides incredibly powerful tax savings. If you can max out contributions every year, it’s greatly valuable to do so.
Want to put even more away for retirement? The next best place will likely be back in your 401(k) plan, up to the annual limit of $18,500. Your 401(k) plan is still a fantastic investment vehicle even without an employer match. You’re able to automatically put a portion of your salary in and not pay any taxes on it until after retirement.
This is just a basic recommendation for what to do with your retirement savings. Our team can help you do so much more! Contact us through email, phone or social media and we’ll be happy to talk with you! We love helping people with their important financial decisions so please don’t hesitate.
