Recent market volatility may have left you staring at your 401(k) in dismay. If you’re not seeing the results you want, there are ways to help grow your 401(k) faster.
Of course, the most obvious solution would be to contribute more. If you get a raise – raise your contribution amount. Hopefully, you’re already taking advantage of “free money” and contributing the full amount your employer matches, but you can always go above that amount as well. Apply any windfall money you come across, including work bonuses, to your retirement accounts. And if you leave your job, don’t leave your 401(k) behind. Rollover your 401(k), and you can avoid many administration fees or other expenses.
Growing your retirement nest egg quickly usually requires much more than just funding your 401(k). Opening a Roth IRA will allow you to build potentially tax-free savings – up to $6,500 annually if you’re 50 or over – in addition to your tax-deferred employer plan.
A Health Savings Account (HSA) is another vehicle that can be used to increase your retirement savings. HSAs offer great tax advantages, with no taxes levied on contributions, earnings and withdrawals for qualified health care purchases. Even if you’re relatively healthy, you’ll still need funding for even basic or preventative health care along the way. And any funds left in your HSA after age 65 can then be used for nonmedical expenses as well.
As with all retirement accounts, it’s best to wait until retirement to tap into your HSA. That way – should you be forced to retire earlier than expected – you’ll still have tax-free funding available to cover health care expenses.
Funding your retirement goes well beyond your employer-sponsored 401(k) account. By looking at other tax-friendly savings vehicles, you can potentially save for retirement quicker and possibly save even more overall. To review your retirement savings plan and ensure you’re taking advantage of all the savings vehicles available to you, contact Jordan Dechtman, Denver wealth manager by calling 303-741-9772, email him at Jordan@JordanDechtman.com or visit our website www.JordanDechtman.com to schedule an appointment.