Between the holiday rush and the end of the year, you might not have thought about your year-end tax planning, specifically maximizing your retirement account contributions.
Rounding out another year comes with a long list of things to get done. Between the holiday rush and the end of the year, you might not have thought about your year-end tax planning, specifically maximizing your retirement account contributions. If you still need to max out your contributions to your retirement plan or individual accounts, doing this at the end of the year is an excellent way to cross one more task off your list before we ring in the new year. Although everyone’s retirement goals are different, there are year-end actions that could help ensure you are keeping your strategy on track. Read on to learn how to maximize your retirement contributions before the new year and how Baltimore-Washington Financial Advisors can help!
Maxing Out Your Allowable Yearly Contributions
Maximizing the allowable yearly contributions is the first and best step toward maximizing your retirement savings. However, many people either forget to contribute the total amount or neglect to make contributions. The end of the year provides an excellent opportunity to cross this financial to-do item off the list just in time to earn your tax deduction. Your maximum contribution to your retirement accounts varies depending on your age. People under the age of 50 can contribute up to $22,500 in their workplace retirement plan, and those who are 50 years or older can contribute $30,000. These totals include catch-up contributions for those 50 and older, who can contribute more towards their account in anticipation of retirement. Employer matching contributions don’t count towards this limit. There are no limits on Roth IRA conversions, and the limits on contributions are $7,000 for those under 50 and $8,000 for those over 50 years old.
Take Advantage of Your Employer Matched Contributions
A few workplace retirement plans include matching contributions. Depending on the employer’s policies, these range from a percentage of each dollar you contribute to your account or a dollar-for-dollar match. If your employer offers matching contributions, you leave money on the table by not maxing out your contributions to the amount the employer matches.
Reevaluate Your Retirement Savings Goals
The amount of money you need to retire comfortably is an always-moving target. Inflation, cost of living expenses, lifestyle, or family concerns can impact the amount you need to enjoy a comfortable retirement. If you set your retirement savings goals and haven’t reevaluated and revisited them, you should take some time at the end of the year to review your figures and ensure they reflect what you need to be comfortable. The team at Baltimore-Washington Financial Advisors is more than happy to review your accounts, so contact us today!
For All Types of Financial Services, Contact Baltimore-Washington Financial Advisors Today!
Baltimore-Washington Financial Advisors is a nationally recognized Fee-Only and Fiduciary wealth management firm, providing comprehensive wealth management since 1986. We integrate investment management, retirement and estate planning, and tax services so you can relax knowing your money is safe. We serve clients throughout the Mid-Atlantic, nationally, and specifically in Annapolis, Baltimore, Ellicott City, Hunt Valley, Catonsville, Pikesville, Bethesda, Columbia, Rockville, Gaithersburg, and more! We’re here to provide you with the best services and advice when you need it. For more information on how we can help, visit our website, or give us a call at 410-461-3900!