Max Out: Your Retirement Account!

Want to do a smart thing? Max out your retirement account. Yep. It’s smart and very beneficial to strive to put the maximum amount into your retirement account(s) every year. When you do so, you can greatly reduce your taxable income and tax burden as well as boost your retirement income. Even if you find yourself behind schedule late into the calendar year, all is not lost; there are still things you can do.

Take advantage of these strategies to make the most of your retirement accounts:

1.“Catch Up” contributions. If you’re age 50 or older, you can make additional contributions to your IRA or other qualified plan. You can contribute an additional $6,500 on top of the current maximum of $19,500 to qualifying plans. For IRAs, you can contribute an additional $1,000.

2. Roth conversion. In many situations, it can benefit you to convert a portion of your traditional IRA or other plan to a Roth IRA before December 31st.

• With a Roth IRA, you pay regular income tax on the funds before you put them in, but once they’re in a Roth IRA, they grow income-tax fee and you pay no income tax when you withdraw them in your retirement (provided you’ve had the account at least 5 years).
• Plus, unlike your traditional IRA, you’re not required to ever withdraw the money if you don’t want to, so they can continue to grow tax free as long as you like. You can even pass them down tax-free to your heirs. So the potential value of funds in a Roth IRA is greater than the…