Rainbows in Retirement: Is there room in your budget to increase your contribution?
If you understand your cashflows, have cash reserves, the next “pot-of-gold” to examine is the contribution dollar amount to your retirement vehicle.
A retirement plan allows you, the investor, to accumulate money to fund your retirement account, and enjoy these invested, and hopefully accumulated funds, at a future date. Individuals accomplish this through many types of business sponsored retirement plans, personal plans, or individual and corporate plans.
Sounds like a good idea, right?
To encourage your participation, the United States Congress passed legislation that allows investors, (you) to invest in certain retirement plans on a tax-deductible and/or tax deferred basis. This means, you can apply (before-tax) earned income, into an investment vehicle, grow your money, tax deferred, and choose to pay taxes at a later date. You want to select this option because your tax bracket is typically lower when you are older, or in retirement years.
Keep more money in your pocket, not Uncle Sam’s pocket!
When you have the opportunity to practice this discipline, please do. I highly recommend you take advantage and advance your financial independence.
If you need additional explanation, or help in choosing a plan that is right for you, learn more through having a chat with me. An educated choice, is a better choice. Schedule a chat with me here….
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