A Taxing Situation – My Biggest Financial Regret
Over the course of my financial life, I’ve made some pretty silly mistakes. I’ve financed the purchase of brand new cars. I’ve purchased goods and services that I never really used. But, my biggest regret – by a long shot – is that fact that I failed to aggressively fund my 403(b) retirement account from the ages of 21 to 31.
For the past two years, I have been fully-funding my 403(b) account.
By doing so -
I reduce my taxable income. Instead of sending tax payments to Uncle Sam, I send contributions to my retirement account. Depending on what your effective tax rate is, the savings can be quite substantial.
I increase my chances of retiring with wealth and dignity. There are no guarantees, but I plan to contribute as much as I can, as often as I can, for as long as I can. I hope to save enough money to retire and enjoy spending time with my friends and family.
I really wish that I would have contributed more during my first decade as an ‘adult’. But, I can’t go back and change the past – and perhaps the fact that I was slack then is the primary motivation for being aggressive now.
If you have questions about effective tax rates,consider reading this article I wrote about the subject.
This article is part of March’s Money Blog Network Series on Taxes.