Saving for retirement is something that everyone should do,
for their own sake. If you need an extra little push to get started on your
retirement savings- and remember it’s never too late to start- or to up your
savings, then you should know that saving for retirement can actually lower your tax bill!
Contribute to Your 401(k)
To start out with, if you don’t already have a 401(k)
through your workplace and one is available, take advantage of it immediately!
Otherwise, you are missing out on easy and even free money that could be put
toward your retirement.
Then, when possible, put the maximum amount allowed in your
401(k). If you’re lucky, this could even put you into a lower and, thus,
lower-taxed income bracket, but either way,
since contributions to your 401(k) are tax-deductible, you’ll lower the
amount of taxed income you have and, thus, how much you have to pay.
Plus, of course, you actually WILL be saving for retirement
in the process, which is always a good thing.
Contribute to Your SEP-IRA
Working for yourself absolutely does not mean that you can’t
save for the future while also saving in the present. If you own your own
business or are otherwise self-employed, you can usually open an SEP-IRA and
then contribute to it tax-free, thus lowering your taxable income, even without
the help of a standard employer.
These are just a couple of options you have for saving for
retirement while also giving yourself a nice little tax break. If you want to
discover more ways to lower your tax bill and plan for your future, be sure to
talk with your accountant about your options.