Ways to save more for retirement after maximizing pension contributions

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  • Even if you’ve maximized your retirement accounts, you can continue to save for later.
  • After-tax 401 (k) contributions could save you thousands more, if you can.
  • Health savings accounts and taxable investment accounts are also smart ways to keep saving.
  • Read more about Personal Finance Insider Coverage »

If you’ve saved aggressively for retirement, you might find a limit in your path.

Retirement accounts only allow you to save a certain amount each year. In 2021, 401 (k) savers can contribute up to $ 19,500 before taxes per person (or $ 26,000 for 50 years old and over). Those who contribute to Roth or traditional IRAs can contribute up to $ 6,000 (or $ 7,000 for 50 and over).

If you want to save more than these limits, you can. Here are some suggestions from financial planners on how to save more for retirement.

1. Consider a health savings account

A health savings account, or HSA, can be a good place to start if you want to save more.

Says financial planner Jovan Johnson of Heritage planning piece, “I like it because the money technically comes in pre-tax, it grows tax-deferred, and it comes out tax-free. If you follow the rules, that’s a triple tax advantage.”

These accounts can help you save more for health care expenses now, but they can also be invested and saved for retirement. The money does not expire, and after 59 and a half years the funds can be used for any purpose.

But, they’re not for everyone – to open one, you’ll need to choose a high-deductible health care plan, which could drive up medical bills in the short term. But, these accounts give you the ability to save and invest for health care expenses, up to $ 3,600 for those with individual coverage and $ 7,200 per year for family health coverage.

“It’s the best account there is, from a tax standpoint,” Johnson said.

2. See if you can contribute after tax to your 401 (k)

If your employer allows it, you may be able to save more than the pre-tax contribution limit of $ 19,500 per year in your 401 (k), according to financial planners.

In some cases, it’s possible to save more for retirement directly into your 401 (k) with an after-tax contribution, according to financial planner John Bovard of Tilt wealth Explain. “The way it’s set up in the IRS tax code, you can make after-tax contributions from your paycheck,” he told Insider. “Some 401 (k) plans allow this for after-tax contributions.”

In 2021, the overall 401 (k) contribution limit is $ 58,000 per year (or $ 64,500 for those 50 or older), and that total figure includes available matches and pre-tax contributions.

Investing more after tax might be a good way to keep investing beyond the usual limit. Before considering this as your option, you should check with your 401 (k) plan administrator to make sure this is possible in your plan.

3. Consider a taxable individual investment account

Other than retirement accounts, a taxable individual investment account has no contribution limit. While it doesn’t have any of the tax advantages of typical retirement accounts, it does offer the opportunity to save as much as you can.

Johnson said this account can be particularly useful for those who wish to retire early. With no age limit for withdrawals, it is possible at any age to live on savings from your pre-retirement investment account.

A taxable brokerage account can also be a flexible place to start saving more if you’re looking for an almost limitless way to save and invest.


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