Although tomorrow is the last day of 2011, today is the last business day.
That means it's the last day you can do something about your retirement savings for the year.
An easy move is to take that 2 percentage points lopped off your Social Security taxes for the next two months and put it into your company retirement plan or your individual retirement account. Keep making those contributions if/when Congress does extend the tax cut through 2012.
The same strategy applies to any raise you get next year. Immediately up your 401(k) contributions before you get used to having some extra cash that you're tempted to blow.
Retirement cash later, tax savings now: Remember, your 401(k) can help keep your income taxes down a bit.
The money you put into the account goes there before taxes are taken out of your paycheck. And the earnings are tax deferred until you take them out in retirement.
It's the same for a traditional IRA.
If you prefer, open a Roth IRA or convert your traditional account to a Roth. Here you pay taxes upfront, but there's no tax bill when you take distributions in retirement.
And check whether your employer offers a Roth 401(k).
Like the IRA of the same name, you pay taxes on the money that goes into the account, but you don't owe Uncle Sam when you use the money to cover your golden years' expenses.
Remember, though, while a Roth works well for many, it's not for everyone. So run the numbers before making the change.
Companies concerned about employee savings: I'm not the only one nagging reminding you to plan for your retirement. Your boss is concerned about your post-work cash flow, too.
A small business survey in November by Harris Interactive on behalf of Nationwide Financial found that 75 percent of small business owners agree that so many Americans are financially unprepared for retirement that it has reached crisis levels.
But while your employer is worried, if you work for a small company you're probably out of luck when it comes to company help with saving.
The survey found that only one in five (19 percent) of small firms offer employees a 401(k) or other employee self-funded retirement plan.
It's not that companies wouldn't like to offer such plans. The main problem is that small businesses need to reach a point of business maturity or critical mass to absorb a retirement plan's cost and administration.
Still, they're getting pressure from employees to do so.
The Harris/Nationwide poll found that 37 percent of companies with more than six employees say their workers are urging the company to offer a retirement plan.
SAVE Act could help: There is a bill pending in Congress that its sponsors and, yes, Nationwide Financial (why do you think it commissioned the survey?), say would help small companies offer retirements plans to workers: Small Businesses Add Value for Employees (SAVE) Act.
The bill, which has been floating around Congress for years and was reintroduced by Reps. Ron Kind (D-Wisc.) and David Reichert (R-Wash.) this session as H.R. 1534, would allow small businesses to pool together to offer Multiple Small Employer Plans (MSEP) that, according to the sponsors, are much less expensive than single employer plans. The bill also would simplify employer administrative requirements.
Pooling generally is a sound and cost-effective concept. We'll see if this bill moves forward in the second session of the 112th Congress.
But until your company does offer a retirement plan, it's up to you to bulk up those savings yourself. Heck, even after you get a retirement plan at work, it's still up to you to maximize it.
So do what you can today. And be sure to increase your efforts in the coming year.
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