Americans usually spend 30 to 40 years building up their retirement funds in order to ensure they have sufficient nest eggs by the time their golden years come around.
But recent market volatility has many pre-retirees, namely those in their 50s and early 60s, worried that their retirement funds and investments will be greatly reduced by losses, according to SmartMoney.com. Although 401(k) balances recently returned to pre-recession levels, financial professionals say boomers should be cautious about their investments and utilize tax benefits to boost income.
For example, individuals over age 50 may begin taking advantage of catch-up contributions, which allows them to contribute more than the maximum to a 401(k), 403(b) or 457(b) savings plan. The contribution maximum for 2011 will remain at $16,500 and individuals over 50 may contribute an additional $5,500.
There are also a number of temporary changes related to capital gains and loss provisions, which are set to expire at the end of this year. Pre-retirees with significant investments may consider speaking with a tax preparer
about the most effective way to take advantage of these benefits.
Every effort has been taken to provide the most accurate and honest analysis of the tax information provided in this blog. Please use your discretion before making any decisions based on the information provided. This blog is not intended to be a substitute for seeking professional tax advice based on your individual needs.
About Liberty Tax Service Liberty Tax Service
is the fastest -growing retail tax preparation company in the industry’s history. Founded in 1997 by CEO John T. Hewitt, a pioneer in the tax industry, Liberty Tax Service has prepared over 8,000,000 individual income tax returns. With 42 years of tax industry experience, Hewitt stands as the most experienced CEO in the tax preparation business, having also founded Jackson Hewitt Tax Service.
Liberty Tax Service is the only tax franchise on the Forbes “Top 20 Franchises to Start,”
and ranks #1 of the tax franchises on the Entrepreneur “Franchise 500.” Each office provides computerized income tax preparation, electronic filing, and online filing through eSmart Tax.