Tax-advantaged retirement accounts like IRAs and 401(k)s have contribution limits, but high earners can explore other savings options. Workers should aim to save 10% to 20% of their income for retirement. Many high earners might max out their 401(k)s while still having savings capacity. Diversifying savings methods beyond tax-advantaged accounts is crucial for building wealth effectively, especially when pension or guaranteed income is considered. Financial advisors can help tailor saving strategies to meet personal financial goals.
Just because accounts like IRAs and 401(k)s have limits doesn't mean you can't save beyond them for retirement. There are various tools for building wealth.
Workers are usually advised to set aside 10% to 15% of their income for retirement. Some experts even recommend saving 20%, which is beneficial if possible.
Very high earners may find saving for retirement complicated, as contributing 10% or 15% of their wages can exceed the maximum allowable IRA or 401(k) contribution.
Don't limit yourself to tax-advantaged accounts. These accounts offer tax benefits, and saving beyond them is essential for those capable of larger contributions.
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