Tax Deferred Savings

Obviously, it's too late to change anything for your 2010 taxes with respect to your savings. But it's the perfect time to max out your 401K, or SEP IRA or whatever tax deferred savings vehicle you are currently contributing to. If you're not currently contributing, you should be. This is the only way to pay yourself first. This is your only means of saving a portion of your income before the IRS gets their hands on it. Again, I have to reiterate that I am not a tax professional, so please contact a qualified professional on the best way to save pre-tax dollars in 2011. If you're already maxed out, good for you.

IRAs or Individual Retirement Accounts have been around for a long time, so I know you're already familiar with the concept of socking away your hard earned money before the government takes their cut. However, It always amazes me when I hear about how many people don't take advantage of these savings vehicles. What can these people possibly be thinking? You can't afford not to be putting something away for the future and it makes absolutely no sense to do it with after tax dollars, unless you've already saved the maximum amount allowed in a tax deferred account(s).

If you do anything to change your taxable income this year, this is the first thing you should take a look at. The sooner you get started, the more you save. It's really that simple. I don't know what else I can say about this subject other than to tell you to contact your Human Resources or Personnel departments where you work, or your financial advisor or whoever you need to talk to in order to find out where you stand with respect to pre-tax savings. Don't be left behind. Now is the time to get your money working for you in the best possible way. Again, if you're already maxed, great! Now see how to best invest your after tax dollars by seeking out tax friendly investments.