So, are you one of those who dreams of a comfortable retirement, but struggle to maximize your contribution to your company’s retirement plan and the amount you can save just isn’t large enough for you to retire comfortably?
The good news is that the new Tax Law may be coming to the rescue. While certain high-profile companies provided employees with bonuses last year after the tax overhaul law sharply lowered the corporate rates, some are instead increasing their contributions to employee 401(k) retirement plans. Thus, the company’s contributions are added to what we all struggle to sock away each year and the increments can be substantial. What goes around, comes around as companies moved from footing the bill for retirement and now its full circle, when it’s the executives who aren’t vested into huge employer contributions, the tide begins to turn. By returning overall compensation to areas other than salaries and bonuses, some are taking a longer-term view and working to motivate a company’s most important asset, their employees.
Let’s review. An individual 401(k) account is generally a worker’s retirement savings vehicle, as we have all heard what to expect from social security as the baby boomers retire. Presently, you can contribute up to $18,500 a year in 2018 into your company’s 401(k) plan, while those 50 and older can put in up to $24,500 a year. These investments grow tax-free until they are withdrawn, and employers typically match with a percentage, essentially providing workers with tax deferred compensation. The more of the latter, the less of the former is what is needed.
It has always surprised us that many employees don’t take the full advantage of company-sponsored 401(k) plans by maximizing the matches. We are seeing trends where it’s hard to see how many will have enough to retire comfortably.
So, let us all get on the “Add to your worker’s retirement savings” and all suggest to everyone that we know that the additional compensation that companies should provide from their post-tax reform profits be returned to employees in this manner. Let us stress the goodwill of making the employee in America considered Great Again. Send the message on to all you know and become part of the movement!
Do you need a fresh look at your tax returns or need to re-file? Czarnowski & Beer is currently offering a complimentary, no-obligation tax return evaluation. To take advantage of this limited time offer, visit our tax return offer page or contact us at firstname.lastname@example.org or call (212) 397-2970 and we will be happy to help you and answer your questions.