AM Tax & Insurance

08/31/2024

08/21/2024

Something else to keep in mind while navigating taxes and retirement: If your employer offers you a pre-tax or ROTH 401K retirement plan, which one should you choose to contribute to?

The answer will depend on your personal tax needs. A pre-tax contribution will give you an immediate tax break for the current year, which means you would pay less taxes now. A post-tax or ROTH contribution means you would pay taxes at your current marginal rate.

Both accounts will let you contribute up to $23,000 (for 2024). Individuals older than 50 are allowed to make a catch-up contribution of up to an additional $6,500.

There are some income limits to take into account. To be eligible to contribute to either of these retirement accounts, your income can't exceed $345,000 for the year.

If you have any questions or need more information as to which one you should take advantage of, please let me know by sending a DM or email.