𝟴 𝗘𝘀𝘀𝗲𝗻𝘁𝗶𝗮𝗹 𝗧𝗶𝗽𝘀 𝗳𝗼𝗿 𝗥𝗲𝘁𝗶𝗿𝗲𝗺𝗲𝗻𝘁 𝗦𝗮𝘃𝗶𝗻𝗴

𝟭.) 𝗚𝗿𝗮𝗯 𝘁𝗵𝗲 𝟰𝟬𝟭(𝗸) 𝗖𝗼𝗺𝗽𝗮𝗻𝘆 𝗠𝗮𝘁𝗰𝗵

If your workplace offers a retirement plan and a company match, you should contribute up to the amount that the company kicks in. For the greatest retirement benefit, contribute up to the maximum amount allowed by law to your retirement savings plans. Start now for the greatest financial benefit.

𝟮.) 𝗖𝗹𝗮𝗶𝗺 𝗗𝗼𝘂𝗯𝗹𝗲 𝗥𝗲𝘁𝗶𝗿𝗲𝗺𝗲𝗻𝘁 𝗣𝗹𝗮𝗻 𝗖𝗼𝗻𝘁𝗿𝗶𝗯𝘂𝘁𝗶𝗼𝗻𝘀

A little-known retirement savings opportunity allows some teachers, healthcare workers, public sector, and nonprofit employees the opportunity to contribute twice as much to retirement plans, due to certain catch-up provisions. These provisions apply to certain 457(b) and 403(b) plan participants. Details are provided on the Internal Revenue Service (IRS) website.

𝟯.) 𝗙𝗶𝗹𝗲 𝗳𝗼𝗿 𝗨𝗻𝗰𝗹𝗲 𝗦𝗮𝗺’𝘀 𝗥𝗲𝘁𝗶𝗿𝗲𝗺𝗲𝗻𝘁 𝗦𝗮𝘃𝗶𝗻𝗴𝘀 𝗖𝗿𝗲𝗱𝗶𝘁

If you are a lower- or middle-income taxpayer, you may claim a tax credit for up to 50% of your retirement plan contribution. If you are married and filing jointly with an adjusted gross income (AGI) of below $68,000 for 2022 ($66,000 for 2021), and you contribute to a qualified retirement plan, you may be eligible for a tax credit.

𝟰.) 𝗨𝘀𝗲 𝘁𝗵𝗲 𝗕𝗮𝗰𝗸𝗱𝗼𝗼𝗿 𝗥𝗼𝘁𝗵 𝗜𝗥𝗔 𝘁𝗼 𝗜𝗻𝗰𝗿𝗲𝗮𝘀𝗲 𝗦𝗮𝘃𝗶𝗻𝗴𝘀

For 2022, the AGI phase-out contribution range for Roth IRAs for married couples filing jointly is $204,000 to $214,000 ($198,000 to $208,000 for 2021) and for single taxpayers and heads of households is $129,000 to $144,000 ($125,000 to $140,000 for 2021). If your current income is too high and makes you ineligible to contribute to a Roth IRA, there’s another way in. First, contribute to a traditional IRA. There is no income ceiling for contributions to a non-deductible traditional IRA, although there is a limit to what can be contributed.

𝟱.) 𝗥𝗲𝘁𝗶𝗿𝗲 𝗶𝗻 𝘁𝗵𝗲 𝗥𝗶𝗴𝗵𝘁 𝗦𝘁𝗮𝘁𝗲

Alaska, Florida, South Dakota, New Hampshire, Tennessee, Wyoming, Texas, Nevada, and Washington all boast the fact that they have no state income taxes.7 Be aware that New Hampshire doesn't tax earned income, but they do tax dividends and interest.

𝟲.) 𝗦𝗲𝗹𝗳-𝗘𝗺𝗽𝗹𝗼𝘆𝗲𝗱 𝗥𝗲𝘁𝗶𝗿𝗲𝗺𝗲𝗻𝘁 𝗦𝗮𝘃𝗶𝗻𝗴𝘀

Even if it’s just a side job, self-employment income allows you to contribute to a solo 401(k) and a Simplified Employee Pension (SEP) plan. You can contribute up to 25% of your net self-employment income, up to $61,000 in 2022 ($58,000 in 2021) with a SEP.10 If you’re under age 50, you can invest up to $20,500 in 2022 ($19,500 in 2021) in a Solo 401(k) in the role of employee.

𝟳.) 𝗧𝗵𝗲 𝗛𝗲𝗮𝗹𝘁𝗵 𝗦𝗮𝘃𝗶𝗻𝗴𝘀 𝗔𝗰𝗰𝗼𝘂𝗻𝘁 (𝗛𝗦𝗔)

With healthcare costs growing and the proliferation of high-deductible health plans (HDHP), the health savings account (HSA) is a golden retirement planning opportunity. This tool can not only be used to pay for healthcare expenses but can also be used to squirrel away additional funds for retirement.

𝟴.) 𝗕𝗲𝗻𝗲𝗳𝗶𝘁 𝗙𝗿𝗼𝗺 𝗚𝗲𝘁𝘁𝗶𝗻𝗴 𝗢𝗹𝗱𝗲𝗿

If you’re over age 50, the tax system is your friend. Retirement plan contribution limits are raised, giving the older investor a chance to accelerate their retirement savings. You’re allowed to increase contributions to both traditional and Roth IRAs to $7,000 for 2021 and 2022. Finally, the government rewards you with the opportunity to contribute an additional $6,500 to the employer-sponsored retirement plan (e.g., 401(k), 403(b), 457) for a maximum amount of $27,000 in 2022 ($26,000 in 2021).