Two Simple Financial Planning Steps You Should Take This Year

Financial tips

Two Simple Financial Planning Steps You Should Take This Year

Posted by Infinite Wealth Advisors, LLC
4 years ago | February 3, 2020

The beginning of a new calendar year also marks the beginning of a tax year, and that means you can take steps that will benefit you next spring. Technically, you can accomplish these tasks at any point during the year, but earlier is better.

To avoid having to play catch-up later in the year, go ahead and take care of these two important financial planning steps right now.

Research your employer’s full matching contribution amount. Many employers offer matching contributions to retirement accounts, but most don’t exactly advertise this information. Call your human resources office to inquire about match amounts, which are usually based upon a percentage.

Next, do the math and figure out how much you need to contribute each week, to reach the full matching amount. Otherwise you’re saying no to an offer of free money for retirement.

Increase your savings rate, no matter what. Even if your employer doesn’t offer a matching contribution, or if you’re already reaching that amount, you should still strive to increase your contribution rate a bit each year. This is especially true if you have received a raise.

Since contributions to qualified retirement accounts are made on a before-tax basis, you can lower your taxable income a bit when you increase your contributions. Strive to save more for retirement each year until you reach the maximum contribution ($19,500 in 2020).

Then, when you turn 50, consider making catch-up contributions as well.

If you need help determining your contribution amounts, or have any other questions relating to retirement planning, let’s schedule an appointment to discuss your concerns.

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