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Tax Advantages

All articles tagged with #tax advantages

personal-finance2 years ago

"Maximizing Retirement Savings: 401(k) Contribution Strategies for 2024"

The 401(k) contribution limits for 2024 have increased, allowing savers to defer up to $23,000 into their plans, with an extra $7,500 for those aged 50 and older. While maximizing contributions can provide tax advantages, financial experts advise considering affordability and other financial goals before doing so. It's important to prioritize short- and long-term goals, including emergency savings, and to consider a "trial and error" approach to finding the right contribution percentage.

via CNBC|
#401k#financial-goals#personal-finance
personal-finance2 years ago

Unlocking the Hidden Potential of Health Savings Accounts (HSAs)

Health savings accounts (HSAs) offer significant tax advantages, but most account holders fail to maximize their benefits by not investing their assets. Only 19% of HSA participants invest their funds, while the rest treat their accounts like bank accounts. Financial experts recommend using HSAs as retirement accounts to cover future health costs. HSAs have a triple tax advantage, with tax-free contributions, investment growth, and withdrawals for eligible medical expenses. The optimal strategy is to hold cash equal to the annual insurance deductible in the account and invest the remainder. However, many people cannot afford to pay current medical bills out of pocket, leading them to continually draw from their HSAs instead of investing. Additionally, about 40% of employers do not offer HSA investment options, but employees can open HSA accounts elsewhere to access investments.

via CNBC|
#health-savings-accounts#high-deductible-health-plans#investment