They say ai???a fool and his money are soon partedai??? ai??i?? the rest of America has until April 15th to part with their hard earned money!
The bad news: Yes, itai??i??s tax time again with only a few short weeks remaining until 2015 income taxes are due; although thanks to a quirk of the calendar, we have a few extra days this year ai??i?? until Monday April 18th ai??i?? to write a check to the IRS.
The good news: You still have time to reduce your payment to the IRS, while simultaneously boosting your future income. Hereai??i??s how:
Make absolutely sure you take full advantage of the retirement savings deductions that are allowed by law.
Look, the sad fact is that many Americans are woefully unprepared for retirement.
A Wells Fargo survey finds the majority of middle-class Americans have saved only about $20,000 for retirement. But according to investment industry estimates, what they likely need is TEN-TIMES that amount, or $250,000.
And one-third of working middle-class adults are not even contributing a dime to a workplace 401(k) plan, and individual retirement account (IRA), or any other type of retirement plan, according to the survey.
Thatai??i??s a big mistake.
Hereai??i??s a good rule-of-thumb: By the time youai??i??re ready to retire you should have somewhere between 8-to-12 times your annual income in savings to enjoy your golden years.
Are you nearing retirement but still falling short of that mark? Youai??i??re not alone, but hereai??i??s how to start catching up.
Contributions to a traditional IRA, a workplace 401(k), or other retirement savings account lowers your taxable income today!
Itai??i??s like creating your own personal tax break. And I donai??i??t know about you, but Iai??i??m no fan of paying MORE tax than is absolutely necessary.
How to Secure a Prosperous Retirement
Weissai??i?? Retirement Savings and Investment Expert Mike Burnick shares his proven retirement savings strategies that will help you supercharge your retirement savings, keep more of what you earn, and protect yourself from the Wall Street wolves and financial pickpockets so you can retire on YOUR terms.
In three jam-packed online sessions youai??i??ll get powerful wealth building tools and Mikeai??i??s personal blueprint for securing your familyai??i??s financial future including:
And much more!
For 401(k) contributions, the money is taken out of your paycheck before taxes. With a traditional IRA, you get to deduct the amount of your contribution on your tax return.
A Roth IRA is a bit different because it doesnai??i??t provide an upfront tax deduction. However, you can stash away more money in a Roth that will grow tax deferred for many years, and distributions during retirement arenai??i??t taxed.
If youai??i??re self-employed or run your own small business or partnership, you have other options for creating your own tax break while saving for retirement.
- Simplified Employee Pension Plan (SEP IRA)
- Savings Incentive Match Plan for Employees (SIMPLE IRA)
- Self-Employed 401(k) plan
Each of these options offers certain tax advantages, including:
- Tax-deferred growth potential ai??i?? contributions are pre-tax and money grows without being eaten away by current taxes
- The potential to deduct employer contributions as a business expense
- A tax credit of up to $500 for certain expenses incurred while starting and maintaining the plan each of the first three years.
Itai??i??s time to play catch-up
If you are age 50 or older, you can increase your own personal tax break and boost your retirement savings by making extra catch-up contributions to your personal IRA and/or workplace retirement plans.
Assuming you qualify, you may be able to make an extra contribution of up to $6,000 to a 401(k), 403(b) or similar workplace retirement plan.
Traditional and Roth IRAs allow you to make an extra catch-up contribution of $1,000 for tax advantage savings if you act by April 18th.
The bottom line: taking full advantage of your tax-deferred savings options can provide you with a tax break today, and can substantially boost your retirement savings for tomorrow.
Mike Burnick is the Instructor of theAi??Planning for a Prosperous RetirementAi??course.Ai?? Mike brings a wide range of experience in the financial services industry, with over 25 years of professional investment experience.Ai?? He was a Registered Investment Adviser and portfolio manager responsible for the day-to-day operations of a mutual fund.Ai??Mike joined Weiss Research in 2002 as an analyst and writer and in 2008 was named Director of Research and Client Communications at Weiss Capital Management, where he assisted managing the day-to-day asset allocation and trading responsibilities for a $5 million ETF strategy.