I’m guessing your goal is to live a long, happy life. But here’s a reality check: a long life can be costly.
The difference between those who enjoy a carefree retirement and those who worry about finances in their later years often comes down to one thing—taxes.
Which side would you rather be on? I’m assuming the tax-free side…
Well, thanks to my experience with this sort of thing, I’ve been able to compile 3 simple tricks to get you on that side.
Here they are…
The beauty of minimizing your tax burden is that more of your money stays where it belongs—in your pocket!
Here are those 3 easy tricks to help you do just that:
Trick #1: Invest in a Health Savings Account (HSA)
If you’re over 55, you can invest up to $7,000 a year in an HSA, covering medical expenses tax-free.
While you’ll pay income tax upfront, the growth of your HSA will more than make up for it.
If you’re healthy and don’t need these funds for medical costs, you can leave the money in a trust for a family member to inherit or withdraw it for other uses (though there’s a penalty if you’re under 65).
Trick #2: Open a Roth IRA
With a Roth IRA, you can invest up to $6,000 annually with the advantage of tax-free withdrawals later on.
This is money you can freely spend in retirement, whether it’s on a home, a car, or other personal expenses.
Trick #3: Contribute to a Roth 401(k)
A Roth 401(k) allows you to invest up to $22,000 if set up properly. With employer matching, you could double your $11,000 contribution and withdraw all of it tax-free when you retire.
This strategy, recently introduced by the IRS, allows tax-free withdrawals from 401(k) or 403(b) accounts in retirement.
Altogether, these 3 simple tricks let you invest up to $35,000 a year. After a decade of investing this way, you could build a nest egg worth up to $440,899—tax-free!
