Government Regulated Savings Plans Include Government Imposed Restrictions
Updated: Dec 28, 2019
Everyone is "cheering" that you get to put more into your IRA or 401(k) plan next year! (Woohoo!; /end sarcasm)
Yes, you can get a higher amount for tax postponement today.
But is that really in your long-term best interest?
If you defer taxes today and you're at the 20% bracket (or even lower)... what bracket will you pay when you pull the money out? Do you think taxes will be at this same level or lower in the future? Or do you think they'll go higher?
Can you get access to your savings if and when you need it for either emergency or opportunity? Does your need fall into the acceptable IRS Hardship Provisions?
Remember - Just because the masses are doing it, doesn't necessarily mean that you should. (Sometimes the 'm' is silent!)
David H. Kinder | Lifetime Tax & Wealth Educator
Dynamic Advanced Insurance, Financial, and Retirement Strategies