4 Painless Ways to Achieve Financial Security

10/31/2022 - By Elizabeth S. Varhalla, CPA

This blog has been updated on 9/29/2022 from its original publishing on 4/27/2017.

We all know that it's never too early to start planning for retirement or to start building a nest egg for future expenses. Financial security is a goal that we all have in mind, but are you taking advantage of the easy opportunities that can help you accelerate the process? Other than utilizing sensible spending habits, here are some quick strategies to help you reach financial security sooner than you think.

Maximize 401K matching offered by your employer. Not only are your contributions tax-deferred, but so is the matching amount contributed by your employer. At a minimum, contribute enough of your salary to your 401K to take full advantage of the maximum match offered.
Use your employer-offered Cafeteria Plan. If your employer offers a cafeteria plan, by all means, run your health insurance premiums and other benefits through the plan. These deductions will reduce your taxable income, resulting in more take-home pay for you, plus a lower tax liability when taxes are due.
Open a credit card account with a financial institution that offers cash back on purchases. Cashback is free money! It is important that you only charge what you can afford to pay off the next month. If you pay off your balance each month you will not incur any interest charges, plus you get a nice bonus when your cashback is posted to your account.
Contribute to an IRA. In 2022, you can contribute up to $6000 ($7000 if you are over 50) to a traditional or Roth IRA. A traditional IRA contribution may be tax deductible, saving current tax dollars and deferring taxes on the growth of the IRA until you take distributions at retirement. A Roth IRA is not deductible, but you receive the benefit of tax-free withdrawals in your retirement years. Consult a tax advisor or IRS.gov website to determine IRA contribution rules and limits.

The bottom line is that taking advantage of these 4 ways to save money is a no-brainer! The road to financial security is paved with opportunity and discipline.

For more information on how to build a budget to boost your savings, read this blog by Pierce Broscious, CFP®.

Questions?

Reach out to our Tax team for questions on tax deductions and taxable income and our Financial Advising team to help you manage your finances and achieve financial security.

About the Author | Beth Varhalla, CPA

Beth is a shareholder in the Tax & Accounting Services practice at Saltmarsh, Cleaveland & Gund. She joined the firm in 1987 and has over 30 years of accounting experience. She provides tax and consulting services for individual, partnership and corporate clients, along with financial accounting and QuickBooks consulting services. Her areas of specialization include law firms, real estate and healthcare companies.