One of the most common mistakes people in and around Greenville make is to fail to optimize their tax strategies. Paying more taxes than necessary is not just a bad decision; it is taking away money that can be used to build your retirement nest egg.
Matt Dixon, a Registered Financial Consultant in Greenville, offers insight to his clients on utilizing tax planning strategies as an effective way to add to their retirement savings. The earlier this process starts, the greater the amount of money that accumulates through compound interest and wise investments.
While it is important to customize your approach to tax savings with the help of Matt Dixon, there are some general considerations anyone can use to avoid penalties and save their hard-earned dollars.
Contribute to 401k Plans
Contributing to a 401k plan not only saves taxes in the year of the contribution, but also provides you with a deduction that may mean getting a refund rather than paying. Optimizing any matching contributions from your employer is a simple way to build your retirement. Other considerations include a Roth 401k or IRA.
Different types of investments may be held in taxable accounts. Many types of investment accounts, including stocks, will be taxed at the capital gains rate, which is less than typical tax rates for income. Bonds, on the other hand, are better managed through a non-taxable retirement account.
Specialists like Matt Dixon can work with people in their working years to optimize their investments and tax options. This is an effective way to add to your retirement fund without the need to increase your income and potentially your tax rate.
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