{"id":14254,"date":"2023-01-24T14:51:21","date_gmt":"2023-01-24T20:51:21","guid":{"rendered":"https:\/\/johnsonwim.com\/?p=14254"},"modified":"2023-01-24T16:26:42","modified_gmt":"2023-01-24T22:26:42","slug":"how-to-help-maximize-returns-from-your-retirement-savings-accounts","status":"publish","type":"post","link":"https:\/\/johnsonwim.com\/how-to-help-maximize-returns-from-your-retirement-savings-accounts","title":{"rendered":"How to Help Maximize Returns from your Retirement Savings Accounts"},"content":{"rendered":"

There are dozens of excuses for not saving for retirement. However, there are many reasons why the longer you wait to start saving, the more financially difficult it will be in the future. Here’s why developing a plan and taking advantage of every savings opportunity can help set you on a path to financial freedom in your golden years.<\/strong><\/p>\n

Let\u2019s face it, in the shuffle of immediate priorities, saving and planning for retirement isn\u2019t a walk in the park. For some, retirement can seem so far into the future that it isn\u2019t worth addressing today. However, many would say that you can\u2019t get started early enough, because the sooner you start, the sooner you may be able to retire.<\/span><\/p>\n

One of the most important aspects of retirement planning is making sure your savings are working as hard as they can for you.<\/span><\/p>\n

Here are a few ways to help maximize the returns from your retirement savings accounts.<\/b><\/span><\/p>\n

Take Advantage of Employer Matching Contributions<\/b><\/h4>\n

Are you still in the workforce?<\/span><\/p>\n

Employer matching contributions are a great way to help boost your retirement savings. In Iowa, many employers offer matching contributions for 401(k) or other retirement savings plans as a benefit to their employees’ golden years.\u00a0<\/span><\/p>\n

However, not all employer matches are the same… Some employers offer a 50% or 100% matching benefit, while others won’t match any of your contributions. Some plans may offer a lower-percentage contribution match on a higher percentage of your pay. For example, a company might match 50% of the first 8% of your pay rather than matching 100% of the first 4% of your pay. This is done so employees will put more in their accounts. This strategy is called “stretching the match.”<\/span><\/span><\/p>\n

It is important to take full advantage of employer matching contributions because it is essentially free money. Not contributing enough to get the full match means leaving money on the table. But if you fail to put money into your 401(k), you give up the matching amount as well. <\/span><\/p>\n

Remember that helping to help maximize employer matching contributions is a great way to increase your retirement savings and reach your goals faster.<\/span><\/p>\n

Diversify Your Investments<\/b><\/h4>\n

Diversifying your investments is a key aspect of helping to manage risk and help maximize returns. By spreading your investments across different asset classes, industries, and geographic regions, you can help reduce the impact of any one investment on your overall portfolio.<\/span><\/p>\n

One way to diversify your investments is to invest in a mix of stocks, bonds, and real estate. Stocks represent ownership in a company and have the potential for higher returns, but also come with more risk. Bonds, on the other hand, are debt securities that offer a fixed return and are generally considered less risky than stocks. Real estate can also be a good investment option, as it can help provide a steady stream of income through rent and potential appreciation in value.\u00a0<\/span><\/p>\n

At the end of the day, your trusted financial advisor can be greatly beneficial in helping you create a diversified portfolio that aligns with your unique situation and goals.<\/span><\/b><\/p>\n

Consider a Roth IRA<\/b><\/h4>\n

A Roth IRA is a type of individual retirement account (IRA) that is available to residents of Iowa and other states. Unlike traditional IRAs, contributions to a Roth IRA are made with after-tax dollars, which means that you do not receive a tax deduction for your contributions.<\/span><\/p>\n

One of the main benefits of a Roth IRA is that it allows you to access your money tax-free in retirement. This can be especially beneficial for those who expect to be in a higher tax bracket in retirement than they are currently. Additionally, there are no required minimum distributions (RMDs) for Roth IRAs during the account holder’s lifetime, so the money can continue to grow tax-free.<\/span><\/p>\n

It’s important to note that contributions to a Roth IRA are subject to the same annual contribution limits as traditional IRAs, and contributions must be made by the tax-filing deadline, usually April 15th, of the following year.<\/span><\/p>\n

However, it’s important to consider your current and expected future tax situation, as well as your overall retirement savings strategy, before deciding whether a Roth IRA is right for you. It is always a good idea to consult your financial advisor or tax professional before making a decision about contributing to a Roth IRA.<\/span><\/b><\/p>\n

Take Advantage of Tax Breaks<\/b><\/h4>\n

Iowa offers several tax breaks for retirement savings that can help residents save money on their state taxes while they save for retirement.<\/span><\/p>\n