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Make the Maximum Contribution to Your Retirement Plan & Retire Secure Portland OR

Now, let's assume you have been contributing only the portion that your employer is willing to match and yet you barely have enough money to get by week to week. Does it still make sense to make non-matched contributions or Roth IRA contributions assuming you do not want to reduce your spending? Maybe. (This article does not address Roth IRA contributions vs. non-matched 401(k) contributions and hereafter only refers to non-matched 401(k) contributions).

Derek Lenington
Lenington Financial
(503) 928-5585
107 SE Washington Street, Suite 455
Portland, OR
Expertises
Retirement Plan Investment Advice, Cash Flow/Budgets/Credit Issues, Hourly Financial Planning Services, Middle Income Client Needs, Planning Issues for Unmarried & Same-Sex Couples, Investment Advice without Ongoing Management
Certifications
NAPFA Registered Financial Advisor, CFP®, MBA

Marilyn Bergen
CMC Advisers, LLC
(503) 227-5284
4800 S.W. Macadam Avenue, Suite 305
Portland, OR
Expertises
Advising Medical Professionals, Women's Financial Planning Issues, Planning Issues for Business Owners, Retirement Planning & Distribution Rules, Estate & Generational Planning Issues
Certifications
NAPFA Registered Financial Advisor, CFP®

David Morganstern
CMC Advisers, LLC
(503) 227-5284
4800 S.W. Macadam Avenue, Suite 305
Portland, OR
Expertises
High Net Worth Client Needs, Planning Issues for Business Owners, Estate & Generational Planning Issues, Retirement Plan Investment Advice, Ongoing Investment Management
Certifications
NAPFA Registered Financial Advisor, AIF, CFP®, MS

Shawn Koch
Koch Financial Partners, LLC
(503) 505-5868
205 SE Spokane Street, Suite 368
Portland, OR
Expertises
Hourly Financial Planning Services, Retirement Plan Investment Advice, Divorce Planning, Planning Issues for Unmarried & Same-Sex Couples, Middle Income Client Needs, Advising Employee Benefit Plan Participants
Certifications
NAPFA Registered Financial Advisor, CFP®, JD

Peggy Kessinger
Cedar Financial Advisors, LLC
(503) 512-5890
3853 SW Hall Blvd
Beaverton, OR
Expertises
Helping Clients Identify & Achieve Goals, Planning Concerns for Corporate Executives, Advising Entrepreneurs, Advising Employee Benefit Plan Participants, College/Education Planning, Ongoing Investment Management
Certifications
NAPFA Registered Financial Advisor, CFP®, MBA

James Corbeau
Maas Capital Advisors, LLC
(888) 354-6227
351 NW 12th Avenue
Portland, OR
Expertises
Ongoing Investment Management, Helping Clients Identify & Achieve Goals, Planning Issues for Business Owners, Retirement Planning & Distribution Rules, Retirement Plan Investment Advice
Certifications
NAPFA Registered Financial Advisor, CFP®, MBA

Robert Pool
Arcadia Investment Advisors
(503) 224-4089
825 NE Multnomah Street, Suite 1160
Portland, OR
Expertises
Ongoing Investment Management, Helping Clients Identify & Achieve Goals, Retirement Planning & Distribution Rules, Retirement Plan Investment Advice
Certifications
NAPFA Registered Financial Advisor, CFP®, CFS, MSFS

Ryan McClung
McClung Wealth Management
(503) 639-4070
1500 NE Irving, Suite 430
Portland, OR
Expertises
Ongoing Investment Management, Retirement Planning & Distribution Rules, Estate & Generational Planning Issues, Planning Issues for Business Owners, Real Estate Investments, Tax Planning
Certifications
NAPFA Registered Financial Advisor, CFP®, CPA/PFS

Grant Griffith
Griffith Asset Management, LLC
(503) 246-3448
10260 SW Greenburg Road, Suite 400
Portland, OR
Expertises
Hourly Financial Planning Services, Ongoing Investment Management, Middle Income Client Needs, High Net Worth Client Needs, Retirement Planning & Distribution Rules, Estate & Generational Planning Issues
Certifications
NAPFA Registered Financial Advisor, BS

Tim Kober
Cedar Financial Advisors, LLC
(503) 512-5890
3853 SW Hall Blvd
Beaverton, OR
Expertises
Hourly Financial Planning Services, Cash Flow/Budgets/Credit Issues, Ongoing Investment Management, Advising Employee Benefit Plan Participants, Middle Income Client Needs, Retirement Planning & Distribution Rules
Certifications
NAPFA Registered Financial Advisor, BS, CFP®

Make the Maximum Contribution to Your Retirement Plan & Retire Secure

Provided By: 

Frugal Living

Saving For Retirement: Make the Maximum Contribution to Your Retirement Plan & Retire Secure
By James Lange 
   

Many people perhaps you feel they cannot afford to save for retirement. The truth is you may very well be able to afford to save, but you don t realize it. That's right. I am going to present a rationale to persuade you to contribute more than you think you can afford.

First, I am operating on assumption that you are following the cardinal rule of saving for retirement: If your employer offers a matching contribution to your retirement plan you are contributing whatever your employer is willing to match even if it is only a percentage of your contribution and not a dollar for dollar match.

Now, let's assume you have been contributing only the portion that your employer is willing to match and yet you barely have enough money to get by week to week. Does it still make sense to make non-matched contributions or Roth IRA contributions assuming you do not want to reduce your spending? Maybe. (This article does not address Roth IRA contributions vs. non-matched 401(k) contributions and hereafter only refers to non-matched 401(k) contributions).

If you have substantial savings and maximizing your retirement plan contributions causes your net payroll check to be insufficient to meet your expenses, you should maximize retirement plan contributions.

The shortfall for your living expenses from making increased pre-tax retirement plan contributions should be withdrawn from your savings (money that has already been taxed). Over time this process, i.e., increasing contributions to your retirement plan and funding the shortfall by making after-tax withdrawals from an after-tax account, transfers money from the after-tax environment to the pre-tax environment. Ultimately it results in more money for you and your heirs.

Another way to squeeze blood from a stone is to consider an interest only mortgage. The reduced mortgage payment (in contrast to what you would be paying on a 30-year fixed rate mortgage) is deductible as a home interest expense. The additional cash flow from the reduced payment could be used to pay credit card debt or fund one or more tax favored investments. You could open a Roth IRA, make additional retirement contributions, and/or purchase a tax-favored life insurance plan. In the long run, you could be better off, often by hundreds of thousands of dollars. Of course there are risks with this strategy.

Another opportunity to shift savings from the after-tax environment to tax advantaged retirement savings might arise if you are the beneficiary of an inheritance.

Take this Changing Your IRA and Retirement Plan Strategy after a Windfall or an Inheritance mini case study for example:

Joe always had trouble making ends meet. He did, however, know enough to always contribute to his retirement plan th...

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