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6 End-of-Year Retirement Planning Tips That Will Save You Money
Source:
money.usnews.com
- Nov 21, 2016
Meeting retirement account deadlines can help you qualify for tax breaks or avoid tax penalties. Some retirement accounts have year-end deadlines for contributions and required distributions, while others give you extra time to make deposits that will count toward tax year 2016. These last-minute moves will qualify you for retirement savings tax perks.
Make 401(k) contributions. 401(k) contributions are typically due by the end of the calendar year. You can claim a tax deduction on up to $18,000 that you save in a 401(k) account in 2016. A worker in the 25 percent tax bracket who fully funds his 401(k) could reduce his 2016 tax bill by $4,500. Income tax won't be due on this money until it is withdrawn from the account. "Make sure you are maximizing the employer contribution to your 401(k)," says Mike Palmer, a certified financial planner and managing principal of Ark Royal Wealth Management in Raleigh, North Carolina. "That means making sure to contribute whatever threshold amount is required to at least get the total employer contribution that's available."
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Category: General Business
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