You know to contribute enough to your 401(k) to get the full company match. Maybe you've even adjusted your withholding so you're not giving Uncle
Yet you may feel the need to do even more, especially if you're making the last big push toward retirement. These hacks allow you to shelter more money from taxes now and when you retire. They include:
—Last-minute 529 deductions. You'll get the most value from state-based college savings plans if you have many years for your contributions to grow. But you may be able to wring a last-minute tax benefit even if your child is about to head off to college or is already there. Most states offer deductions or credits for contributions and don't have minimum holding periods, said
—Using HSAs to supercharge your retirement savings. Health savings accounts are designed to help people pay their share of high-deductible medical insurance plans. But they offer a rare triple tax break: Your contributions are deductible going in, your money grows tax-deferred, and withdrawals are tax-free if used to pay for qualified medical services. Some financial experts are so enamored of the benefits that they recommend funding an HSA even before contributing enough to a 401(k) to get the full company match. To take full advantage of this strategy, though, HSA owners need to leave the money alone to grow, which means paying deductibles and copays out of their own pockets — and those amounts can be steep. For a family, the maximum out-of-pocket expense for 2017 is
—Backdoor Roth contributions.
—Mega backdoor Roth contributions. Many people can do a backdoor Roth, but the stars really have to align for a mega version to be possible. Once again, you're contributing after-tax money to a retirement account and then quickly converting it to a Roth vehicle. This time, though, the account you're using is a 401(k) that allows after-tax contributions beyond the usual deferral limits of
This column was provided to The Associated Press by the personal finance website