retirement

8 ways to accelerate retirement savings

Start a sideline
8 of 8
Back
Start a sideline

Consider starting a part-time business and putting some of your business earnings into another retirement fund to supplement your employer-sponsored plan.

Marc Henn, a Certified Financial Planner and president of Harvest Financial Advisors in West Chester, Ohio, says an IRA is the simplest choice, although your extra income may erode the tax benefits of that retirement vehicle.

Single taxpayers with an employer-sponsored plan begin losing the IRA tax deduction when they earn $56,000 in modified adjusted gross income, and the deduction disappears entirely when earnings hit $66,000. Married joint filers with employer-sponsored plans get a partial deduction when their MAGIs exceed $90,000, and the tax deduction disappears entirely at $110,000.

Income limits apply to Roth IRA contributors as well, though they're much higher: $122,000 for single taxpayers and $179,000 for married filing jointly. Of course, with a Roth, you forgo a tax deduction upfront but reap tax-free benefits at the time you withdraw the money.

Don't forget about other types of retirement vehicles with tax-favorable benefits. With a Simplified Employee Pension, or SEP plan, or a Single 401(k), you can avoid the income restrictions that an IRA imposes. A SEP allows contributions of up to 25 percent of your salary, or $49,000, whichever is less. The Single 401(k) contribution limit is $49,000, with a $5,500 catch-up contribution allowed for those 50 or older.


 

 

advertisement

Show Bankrate's community sharing policy
          Connect with us
MORTGAGE HOME EQUITY AUTO CDs CREDIT CARDS
Product Rate Change Last week
30 year fixed 4.29%  0.01 4.30%
15 year fixed 3.23%  0.06 3.29%
5/1 ARM 3.33%  0.12 3.45%
 
View Rates in your area Next
Product Rate Change Last week
30K FICO-based HELOC 4.38% --0.00 4.38%
50K FICO-based HELOC 4.11% --0.00 4.11%
100K FICO-based HELOC 3.96% --0.00 3.96%
 
View Rates in your area Next
Product Rate Change Last week
60 month used car loan 2.63%  0.10 2.73%
48 month used car loan 2.90%  0.07 2.97%
60 month new car loan 3.16%  0.06 3.22%
 
View Rates in your area Next
Product Rate Change Last week
1 Year CD 0.90% --0.01 0.91%
2 Year CD 1.10%  0.02 1.08%
5 Year CD 1.81%  0.07 1.74%
 
View Rates in your area Next
Product Rate Change Last week
Balance Transfer Cards 15.66%  0.01 15.67%
Cash Back Cards 16.36% --0.00 16.36%
Low Interest Cards 10.87% --0.00 10.87%
 
Next
advertisement
CD & INVESTING NEWSLETTER

Learn the latest trends that will help grow your portfolio, plus tips on investing strategies. Delivered weekly.

Blog

Jennie Phipps

Retirees are making it work

A survey by T. Rowe Price suggests that 65-year-olds are retired and living on less, but liking it.  ... Read more

advertisement
Partner Center
advertisement

Connect with us