Love Your Money? Find Ways to Help it Grow
Do you think about how much money you have in savings and how you’ll be able to grow it? Not many do, at least not on a regular basis. So how do you make sure you have enough, especially when you are ready to retire? Here are some tax-advantaged ways that you can grow your nest egg.
A 401(k) is a retirement savings plan that is offered through employers. It is a way to set aside part of your paycheck before taxes to save for retirement. Many employers have some sort of match associated with their 401(k), so your money can add up quickly.
An Individual Retirement Account is another tax-advantaged account that can help you save for your retirement. You can choose between a Roth IRA or a Traditional IRA, the difference is the tax benefit each offers. A Roth IRA uses after-tax dollars so when you withdraw the money no additional tax is deducted. A Traditional IRA is just the opposite. Your money grows tax free and you only pay when you withdraw the money.
A Health Savings Account is an account that provides tax-advantages for money saved for medical purposes. The money that you use to fund this account is not subject to federal income tax. However, the funds can only be used for qualifying medical payments or purchases.
A savings account is another way that you can set aside money for your future. Though most savings accounts don’t provide additional help for growth, just putting aside even the smallest amount from your paycheck can add up to big savings.
Planning for your future is something that should always be top of mind. Speak to your tax professional to help you pick the best option(s) for you.
Disclaimer: The contents of this document are not intended to be, and are not, legal or tax advice. The applicable tax law is complex, the penalties for non-compliance are severe, and the applicable tax law of your state may differ from federal tax law. Therefore, you should consult your tax and legal advisers regarding your specific situation.