Employer retirement plans are often an individual’s greatest investment, because employees keep the long-term mindset needed to stay invested during down markets. Plus, investments are made with every paycheck and equal contributions buy more shares when markets are down.
Unfortunately, many employees limit their salary-deferral contributions to only capture their employer’s match. If you pay your bills in full every month and have adequate savings, we recommend increasing your contributions, for all the reasons above.
For 2024, the new deductible limit for employees under 50 is $23,000. If you turn 50 before the end of the year, you can add another $7,500.
Lastly, you want to spread your contributions out to last through every paycheck, so you capture all the employer-matching dollars available to you.
Do you still have money in a former employer’s plan?
- Employers have greatly narrowed plan investment choices to avoid liability after the tech bubble of 2001.
- Some plans restrict investment choices to “target date” and generic index funds.
- If you’re retirement-minded, getting out of employer plans usually provides greater flexibility in taking money out, including frequency and tax withholding choices.
Can’t wait for the next issue? Learn more about investing beyond the restricted choices in your retirement plan.
So, enjoy today and tomorrow, and let us do the worrying!
Call us to review your investment approach at (404) 941-2800.