Those who are saving for retirement have a myriad of options to take advantage of. There’s social security, standard bank savings accounts, 401(k) accounts, IRA accounts, stocks, bonds, mutual funds and more. Deciding between these options can be overwhelming. Do yourself a favor and visit with your local Miami tax preparer in addition to reading this article.

1. One of the best ways to save for retirement is to take advantage of tax laws by investing in an IRA and a 401(k). If your state’s tax rate plus the federal marginal tax rate adds up to 30%, investing in an IRA and a 401(k) will cost merely 70 cents on the dollar. The government covers the rest of the cost by subtracting it from your tax bill. There are also extra tax credits for those who are of low income but devote some of their money towards retirement savings. It’s a whole lot easier to save for retirement when the government is footing part of the cost.

2. Another important consideration is the fact that many employers offer matching contributions on 401(k) savings that range from 25 cents on the dollar to a dollar to dollar ratio. These often extend up to a specific cap but the amount of money that you’ll be able to put aside for your retirement will turn out to be quite significant when your employer kicks in some funds. Anyone who has an employer that matches 401(k) contributions should max out this option every year.

3. Workers over the age of 50 are encouraged to save more than others in order to “catch up” their retirement savings. This especially helps late savers. Anyone interested in catch up contributions should contact accounting services in Miami to learn the specific rules for contribution limits as they change on a regular basis. They should also inquire about the 2001 tax law changes that altered the annual contribution limits for specific tax deferred savings plans. One’s contributions to multiple savings plans are not interdependent and savers have the ability to save money in several different retirement plans at the same time.

4. When you select stocks, mutual funds, bonds and other investments, diversify your savings between a wide variety of sectors. This is commonly called smart asset allocation. The strategy allows you to minimize your risk by limiting your exposure to specific industries. So invest in numerous sectors in a variety of markets across the world. This way, if one particular market or line of business tanks, you won’t lose your entire nest egg.

5. Alter your retirement investments as you age. If you are young, take some risks with your money. Those who are nearing retirement should invest in bonds, annuities and mutual funds with less risk as they’ll need their retirement funds soon.