By Julie Fletcher, Certified Financial Planner™ at Sharkey, Howes & Javer
1. Even if you are “maxing out” your retirement plan contributions, is it enough?
The retirement plan contribution limits are set by IRS guidelines and reviewed each year. However, the IRS is not a personal financial advisor and does not know how much you need to be saving to meet your financial goals. Just because you are “maxing out” your plan does not necessarily mean you are saving enough.
Many people choose to contribute to the company 401(k) plan, which will allow you to contribute up to $18,000 in 2015 (with an additional $6,000 catch-up for those over age 50). A 401(k) plan allows an employee to contribute a portion of his/her salary on a pre-tax basis to a retirement savings account. Taxes are not paid until money is withdrawn from the account.