STUDIO CITY (CBS) — Will Smayda from Merrill Edge visited KCAL9 Monday to talk about retirement plans for 2012.
Smayda shared new developments that can help investors better prepare for retirement.
Some of the tips he shared include:
1. Reset the Automatic 401 (k) Contribution – The contribution limit for 401 (k)s contribution limit for 401(k)s 403(b)s, and the federal government’s Thrift Savings Plan will increase by $500 in 2012, to $17,000. Workers age 50 and older will be able to contribute an extra $5,500 next year.
2. Get a 401 (k) Match – The best time to elect the percentage of your paycheck to direct deposit into a retirement account is now, before the New Year starts, and aim to at least save enough to capture the maximum 401(k) contribution match your employer offers.
3. Maximize Tax Breaks – Retirement savers can defer taxes on up to $17,000 on a 401 (k) and $5,000 in an IRA in 2012. Those limits jump to $22,500 in a 401(k) and $6,000 in an IRA if you are 50 or older.
4. Contribute to IRA – You can make a 2011 contribution to an IRA or Roth IRA until April 16, 2012, the date when 2011 federal taxes are due next year.
• Tax deductibility of a Traditional IRA contribution is based on several factors and can be confusing, so it’s always wise to review your specific situation with your tax advisor.
5. Put Aside Windfalls for Retirement – Any monetary gifts you might receive during the holidays should be stashed in your savings, starting with retirement accounts.
6. Rebalance your Portfolio – Recent stock market volatility this year may have caused shifts in asset allocations. Now is the time to revisit changes to your investment mix and make changes accordingly.
7. Seek Professional Advice – Investors should consult a tax professional before making any tax-related investment decisions and check in with a qualified financial professional for investment advice.
For more information, visit Merrill Edge.