4 Tips on Getting Free Money for Retirement

It goes without saying that retirement advice is always appreciated and is highly sought after. That’s why we are featuring Retirement Tuesday every Tuesday in June!


While retirement advice is often complicated and must be personalized, we have four tips on picking up free money for retirement that everyone can follow.

free-money

  1. Max out your 401(k).
    Your 401(k) is an excellent tool for getting your retirement money. In order to do this, you should focus on maximizing your contributions and making sure you always get the company match.
    ** To learn how to make your 401(k) work for you, tune in to our blog next week where we will go into 401(k)s in depth.
  2. Open a spousal IRA.
    If your spouse does not have access to a 401(k) (for example, if your spouse is a homemaker), you can open up a spousal IRA. With this type of IRA, you can set aside money each year into your spouses account for you to access after retirement. As a bonus, it will cut your joint taxes down in the meantime.
  3. Max out your Roth IRA.
    Contributions to Roth IRAs can be taken back out immediately if needed with no tax consequences. It is like having a tax free savings account. Therefore, it is smart to max out your contributions every year. If you make over the threshold for contributing to a Roth IRA, call us and we can go over your options. Often, the benefits outweigh the initial cost.
  4. Consider a health savings account (HSA).
    With HSAs, you are essentially taking the money you would be spending on health care and putting it into a separate account… only the money is now pre-tax. As an added bonus, any money not used will roll over every year with interest. For those with high-income, it’s like having a second IRA!

If you have any questions on picking up free money for your retirement, feel free to call us at (314) 993-4285 or email us at office@hkaglobal.com.

Tax Return Forget Me Nots

Red bow on finger

 

Before you submit your tax documents to your accountant for completion of your tax return, take a look at the top 5 most commonly overlooked items below to make sure you’ve included everything:

1. Long term care insurance:  Missouri allows for a deduction from taxable income for a portion of your long term care insurance. Many other states allow a deduction or sometimes a tax credit for these premiums.  Although this is one of the questions in the full version of the organizer, because we are so conditioned that medical expense is limited to 10 % of AGI, we forget that the state may allow for some benefit of these itemized deductions. Long term care insurance should be included on your return to take full advantage of this opportunity.

2. Electronic 1099s:  Many brokerage firms now have the option of sending your 1099s directly to your CPA.  All firms are different, but you may be able to save our email address as your CPA in your brokerage online account and have the 1099s securely emailed to us when they are ready.

3. Business expenses and AMT:  The top marginal tax rate is now 39.6%.  This could mean you are out of the Alternative Minimum Tax (AMT) now or will be in the near future.  While you were not deducting any unreimbursed business expenses while in AMT, now you could deduct them.  If you do not track and send them to us, you will not deduct them.  Remember to send us all business expenses (including mileage driven) with your tax documents so you are not missing out on these deductions.  Also, although there are a few states that do, most states do not have AMT so your expenses would be deductible on the state side even if you are still in AMT so go ahead and send everything to us even if you think you will be in AMT.

4. Non Cash Charitable Donations:  Donating items to charities such as the Salvation Army or Goodwill can save you substantial tax.  Websites such as www.itsdeductible.com and www.satruck.org/valueguide give the approximate values of used furniture, clothing, or appliances.  They make what used to be a difficult process, tracking values of donated items, easy and it will save you real money.  Many times, the values these websites give for items in good condition are higher then you may expect.

5. Charitable Mileage and Supplies:  If you use your vehicle for charitable organizations, you can deduct these miles as charitable donations.  If you purchase supplies on behalf of a charitable organization to use at an event, these are charitable donations.  There is a place on your organize for each of these items so remember to include them if they apply to you.

Thanks for allowing the HKA family to work with you again this year on your 2013 tax returns.  If you are not currently a client and wish to learn more about us and what we can do for you, please click here.