"Maximizing contributions to tax-advantaged accounts is a great way to save for the future while also minimizing taxes. Now is a great time for dentists to consider maximizing these savings opportunities," says Loyd Burleson III, CFP®, CRPC™, ABFP™, financial advisor at Financial Freedom for Dentists.
Because inflation has continued to rise, the amounts that can be contributed to IRAs, HSAs, SIMPLE IRAs, 401(k)s and Profit-Sharing Plans have increased for 2024. By making higher contributions, dentists with the discretionary income to save will be able to save more money in taxes while saving for retirement. Despite the fears of rising inflation, global uncertainty, and lingering economic effects of the COVID-19 pandemic, a recent report on "How America Saves 2023" by Vanguard indicates retirement savings rates had record high participation in 2022. While it is not yet clear if this trend will hold as higher prices hit people's pocketbooks, taking advantage of the opportunity to save more as a hedge against inflation can be a sound financial planning strategy.
Limits on Individual Retirement Accounts (IRAs), Retirement Plans, Health Savings Account (HSAs) contribution limits and the Annual Gift Tax Exclusion are shown for 2024, and how they compare to 2023: