So if you are currently enrolled in a 401k or other employer based retirement plan, now is a good time to check in with your financial advisor and determine whether it makes sense for you to increase your contribution savings rate. If you are already maxing out your savings at $16,500 per year, be sure to increase your savings rate to take advantage of the additional $500 of tax deferred savings. Keep in mind, contributions to a 401k are pre-tax so it reduces your current year taxable income!
Tom Taylor, CPA is a fee-only, independent Financial Planner and Certified Public Accountant and can be contacted at Chesapeake Financial Advisorsor Taylor & Companyin Towson, MD. Tom believes that the greatest benefit of planning includes incorporating tax strategies with financial planning. Tom’s clients receive both services in one advisor. He is a member of NAPFAand the MACPA and AICPA.