Upping The Limit
Every year around this time, Dan and I provide an update on contribution limits for retirement savings accounts. And every time we say something along the lines of “Put time on your side, and sock away as much as you can as early as you can.”
Well, this year is no different.
A key tenet of our approach is to spend time in the market. I can’t think of a better place to do that than in a retirement account. First, you are incentivized to think long-term as there are penalties if you withdraw your money early. And, more importantly, your money compounds unimpeded by taxes. That’s powerful.
It’s why Dan continues to fund his retirement accounts to the full limit of the law even though he’s getting closer and closer to retirement age. And I’ve been funding my accounts since I first graduated from college—future retirement-age Jeff will thank younger Jeff some years down the road.
I know many of you have already retired and are more worried about taking your required minimum distribution (RMD) each year than contributing to a retirement account. I’ll be covering RMDs in the future, but even for those in retirement I think you’ll find some value in reading on.