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2026 Retirement Account Contribution and Eligibility Limits

By on March 1, 2026

Well, we’re just starting the third month of 2026, so it’s a good time to be sure that your retirement savings contributions are properly set up since it’s so much easier to fund these accounts over time instead of having to make larger contributions closer to retirement.  This month we’ll cover the contribution and income limits for 2026 so you can contribute as much as you can afford within the IRS limits.

401(k) & 403(b) Contribution Limits

Employee Contribution Limit:  $24,500.

Catch-up Contribution (ages 50 and above):  $8,000 extra*.

“Super” Catch-up (ages 60-63):  $11,250 (if your plan allows)*.

*Note:  If your 2025 wages exceeded $150,000, catch-up contributions must be Roth (after-tax) rather than pre-tax—but your contribution limit ($24,500) stays the same.

Combined employee + employer contribution Limit:  $72,000.

Individual Retirement Account Contribution Limits (Traditional & Roth IRA)

Annual contribution limit (combined Traditional + Roth):  $7,500.

Catch-up contribution (age 50+):  $1,100 additional.

Note:  You must have earned income to contribute to an IRA.  Spouses with no earned income may qualify under a spousal IRA rule.

Traditional IRA Deductibility Limits

Traditional IRA contributions are always allowed as long as you have earned income, but deductibility depends on your income.  Your 2025 Modified Adjusted Gross Income (MAGI) determines whether your traditional IRA contribution is fully deductible.  Here are a couple of examples for two types of filers.

Single Filers:

≤ $81,000:  Full deduction.

$81,000 – $91,000:  Partial deduction.

≥ $91,000:  No deduction.

Married Filing Jointly:

≤ $129,000:  Full deduction.

$129,000 – $149,000:  Partial deduction.

≥ $149,000:  No deduction.

Roth IRA Contribution Limits

Your 2025 Modified Adjusted Gross Income (MAGI) determines whether you can contribute to a Roth IRA.  (Roth contributions are never tax deductible.)

Single Filers:

<$153,000:  Full Roth contribution allowed.

$153,000–$168,000:  Partial Roth contribution allowed.

≥$168,000:  No direct Roth contribution allowed*.

Married Filing Jointly:

<$242,000:  Full Roth contribution allowed.

$242,000–$252,000:  Partial Roth contribution allowed.

≥$252,000:  No direct Roth contribution allowed*.

*Note:  While you can’t contribute directly to a Roth IRA above these limits, a backdoor Roth strategy may still be available.

The above summary doesn’t cover every possible situation.  For example, there are rules for other types of filers such as those not covered by employer plan.  Perhaps you have a different type of plan such as a 457(b) plan, Thrift Saving Plan, SIMPLE plan or a Simplified Employee Pension (SEP) plan.  Or, maybe you’re wondering about how to use the backdoor Roth strategy.  Whatever your questions on retirement contributions, or any other financial matters you’d like to discuss, we’d be pleased to meet with you in a no-charge, no-obligation initial meeting.  Please visit our website or give us a call at 970.419.8212 to set up an in-person or virtual meeting.

This article is for informational purposes only. This website does not provide tax or investment advice, nor is it an offer or solicitation of any kind to buy or sell any investment products.  Please consult your tax or investment advisor for specific advice.

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Empty Nester Financial Moves

By on February 1, 2026

When your youngest child eventually leaves home, it’s the perfect time to reassess your finances.  It typically costs a family about $24,000 a year to raise a child.  So, depending on the number of children who have left, this can be a significant amount of money.  For many of us, the nest empties out when we’re in out mid to late 40s.  That’s good timing because the peak earning period for many people is ages 45-55 and many people are able to save the most in their 50s and early 60s.  Additionally, many families haven’t sufficiently invested in retirement savings due to the cost of raising children.  But now, you’ll have more money available and this month we’ll look at some of the key financial adjustments you should consider at this important time in your life.

Retirement Savings.  These are your peak earning years and you have lower child expenses.  Perfect!  Increase your 401(k)/403(b) and traditional or Roth IRA savings.  These investments even let you save more with catch-up rules.  In 2026, the standard 401(k) catch-up contribution limits for individuals aged 50 and older increases to $8,000.  A special “super catch-up” of $11,250 applies to those aged 60-63.  IRA catch-up contributions also begin at age 50 and are $1,100 in 2026.  If you still have available funds after this, put them in a taxable investment.  Most of us will need all of these resources in retirement.  Another important retirement consideration is how you’ll pay for ever-increasing health expenses.  Whether these funds come from savings or from some form of insurance, these costs are important and considerable.

Housing.  Think about the size of your home.  Maybe it was perfect for a family of five, but seems unnecessarily large for two people.  If you want to downsize, it can free up significant amounts of money and probably lower your mortgage.  Having said that, many people cherish continuing to live in the house where their kids grew up.  It’s a choice.

Reducing Expenses.  For many families, a great way to save is to free up cash by reducing expenses.  This might be your mortgage, credit cards and student loans.  This cash might also be funneled into your retirement savings.  Maybe you don’t need as much life insurance at this point.

Estate Plans.  Whenever there are significant changes in our lives, it’s always wise to revisit our estate plans.  Do they still reflect your wishes?  Have grandchildren become a factor?

Planned Enjoyment.  It can be tricky to balance enjoying life now AND preparing to enjoy it in retirement.  Nonetheless, it shouldn’t be all one way or the other.  It’s truly a balance.

Supporting Adult Children.  Naturally, there will be times when you will want to provide support for your kids.  Just keep in mind that this is the time you must prioritize retirement, so you can accumulate enough money and so that it has time to grow.

Yep, that’s quite a bit to think about.  If you’d like some help looking at this important life transition, or help with any other financial matter, we’d be pleased to meet with you in a no-charge, no-obligation initial meeting.  Please visit our website or give us a call at 970.419.8212 to set up an in-person or virtual meeting.

This article is for informational purposes only. This website does not provide tax or investment advice, nor is it an offer or solicitation of any kind to buy or sell any investment products.  Please consult your tax or investment advisor for specific advice.

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Smart Money Moves for 2026

By on January 1, 2026

January 2026, can you believe it?  This is the perfect time to get organized to improve your financial picture throughout the coming year.  There are many things a person might do and, as always, the best moves depend on your circumstances.  Nonetheless, many experts agree that the following list might be useful.

Check Signals.  Since it’s now football playoff time, I couldn’t resist that title.  But seriously, just as the quarterback scans the defense and figures out what play to run, we should look over our situation and figure out the best things we can do in the next twelve months.

Emergency Fund.  Yep, there are surprises in life and sometimes they’re pretty expensive.  Have you put aside three to six months in savings in case you lose your job, in case someone needs healthcare involving significant copays, in case you need a new car or in case your house needs a major repair?

Debt Reduction.  Retiring high-interest debt is a super important financial goal.  Once eliminated, you’ll have more money in your pocket.

401(k).  I’ve said this before and I’ll keep on saying it, if your employer offers matching funds for its 401(k) program, take them – all of them.  It’s free money and it will help you prepare for your retirement. So make sure your contributions cover the full employer match.

IRA.  If you can invest money on a tax-deferred basis, this should be your next stop after the 401(k).  (Even if your income is too high for the tax advantage, a Roth IRA will create a retirement account where withdrawals will be tax free!)

Insurance.  Be sure your policies still cover your needs.  Did you have a new child last year and does that mean your life insurance should increase?  Have home prices in your area gone up and will your homeowner’s insurance still cover replacement costs?

Healthcare.  Think about this specifically during your insurance review as it’s so critical to your financial wellbeing.  Is last year’s coverage still satisfactory for 2026?  If you’re eligible for an HSA, are you set up to make regular contributions?  Do you have a plan to cover assisted-living and other medical expenses as you age?

College.  Have kids or other little loved ones?  A great way to help these children prepare for their future is to set aside money to help with the expensive cost of college.  A 529 is one tax-efficient way to approach this.

Automatic Deposits.  You’ll probably have the greatest financial success if you set up automatic deposits to fund your various objectives.  If you never see these funds, it will be easier to operate on the income that is available.

Tax Payments.  Whether money is withheld from your paycheck or you file quarterly estimates, confirm that the amounts are okay and that you won’t be needlessly loaning the government interest-free money (overpayments) or be on the hook for interest and penalties (underpayments).

Estate.  Are your estate documents up to date?  Have important people entered or left your life since the last revision?  Are your appointed representatives still able to act on your behalf when necessary?

That’s quite a bit to think about, but I’ll bet you can appreciate how important it is.  If you’d like a little help planning for the coming year, or help with any other financial matter, we’d be pleased to meet with you in a no-charge, no-obligation initial meeting.  Please visit our website or give us a call at 970.419.8212 to set up an in-person or virtual meeting.

This article is for informational purposes only. This website does not provide tax or investment advice, nor is it an offer or solicitation of any kind to buy or sell any investment products.  Please consult your tax or investment advisor for specific advice.

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2025 Year-End Tax Checklist

By on December 1, 2025

Only 31 days until 2026! By taking certain steps before the end of the year, you might be able to significantly reduce your 2025 tax bill. This month, we’ll go over some things to review before the end of the year.

Review Major Life-Event Taxes

If any of these happened in 2025, adjust your tax planning as they can change your deductions, tax bracket and filing status.

• Marriage or divorce

• Birth or adoption

• Home purchase or sale

• Large medical bills

• Inheritance

• Starting or closing a business

Review Your Withholding & Estimated Taxes

Do you hate having to pay penalties for not having adequate withholding or quarterly payments? You can avoid these via the IRS “Safe harbor rules.” These rules protect taxpayers from underpayment penalties as long as they meet certain minimum payment requirements — even if they end up owing more tax when they file. These are most commonly used for estimated tax payments. Here’s how it works: pay at least 90% of the tax you owe for 2025 or pay 100% of your 2024 tax (110% if your income was over $150,000) to avoid any penalties.

Decide Whether to Itemize or Take the Standard Deduction

For 2025, the standard deduction for single filers is $15,750 and for joint filers it’s $31,500. So, now you need to tally up your eligible itemized deductions to see which approach is best for you.

As a reminder, itemized deductions can include:

• Medical expenses that are over 7.5% of AGI. So, if possible, schedule elective procedures or pay medical bills before year-end if it helps surpass the 7.5% of AGI threshold.

• State and local taxes up to $40,000 in 2025 (deduction is reduced or even eliminated for high-income filers).

• Mortgage interest on qualified loans. Interest on your mortgage, points and prepaid interest and Home Equity Loans and Lines of Credit (HELOCs) used to buy, build or substantially improve your home are deductible.

• Charitable contributions. You can donate cash or appreciated investments. If you’re 70½+, you can make Qualified Charitable Distributions (QCDs). A QCD is a direct transfer of money from your traditional IRA to a qualified charity. In 2025, the contribution is limited to $108,000 per person. A QCD is excluded from your taxable income. And better yet, if you’re 73+ and required to take a Required Minimum Distribution (RMD), a QCD satisfies part or all of your RMD.

• Casualty or theft losses are deductible only if the loss is from a federally declared disaster like a hurricane, wildfire, or flood officially declared by FEMA. (Not deductible for losses from typical theft, car accidents or minor incidents outside of declared disasters.)

• Other deductions can include unreimbursed business expenses (if allowed) and investment interest (that is, interest paid on money borrowed to buy investments that generate taxable income).

• If your itemized deductions are just below the standard deduction, consider “bunching” expenses into one year. For example, prepaying property taxes or charitable contributions before December 31.

• Maximize your HSA and FSA contributions and remember to use up your FSA funds if they can’t be rolled over (which is typical).

• Capital Gains & Tax-Loss Harvesting. You can offset capital gains by selling losing positions. In addition, you can use up to $3,000 of net capital losses against ordinary income.

Check Tax Credits

See if you quality for any tax credits. (As a reminder, a tax credit is a dollar-for-dollar reduction in the amount of tax you owe.)

• Child Tax Credit

• Earned Income Tax Credit

• Education credits (American Opportunity Tax Credit and/or Lifetime Learning Credit)

• EV credits — if the vehicle was purchased by September 30, 2025.

• Energy-efficient home improvements credit (if you upgraded your home in 2025).

Consider Gifting & Estate Moves

In 2025, you can give up to $18,000 per recipient tax-free without affecting your lifetime estate and gift tax exemption. No gift tax is owed and the gift is excluded from your taxable income.

Whew, that’s quite a lot to consider.  If you’d like some help thinking about all of this, or any other financial matter, we’d be pleased to meet with you in a no-charge, no-obligation initial meeting.  Please visit our website or give us a call at 970.419.8212 to set up an in-person or virtual meeting.

This article is for informational purposes only. This website does not provide tax or investment advice, nor is it an offer or solicitation of any kind to buy or sell any investment products.  Please consult your tax or investment advisor for specific advice.

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What is Spaving?

By on November 1, 2025

Most of us recognize that many marketing campaigns are designed to get as much of our money as they can and to get it right now.  This has actually led to a term called spaving which is a blend of spending and saving.  It refers to the illusion of saving money by spending money.  In other words, you spend more than you’d planned thinking you’re saving money.

As an example, you go to a store planning to buy one shirt for $30.  You see a deal:  “Buy two, get one free,” so you buy three shirts for $60.  You tell yourself you “saved” $30, but you actually spent double what you intended.  Another very common example is “Free shipping on orders over $50.”  You add random items to hit $50 instead of paying a $5 shipping fee — effectively spending more than needed.

Naturally, there are times to spend a little more, but often you’re tricked into this.  You might properly spend more to get a good deal on toilet paper or other items that you’ll definitely use and that are cheaper in bulk.  You might avoid a $25 shipping charge by adding a $5 item to your order.  It all boils down to whether you’ll really use the items and what the total price of the alternatives is.

So, it’s a good idea to watch out for these marketing tricks.  Here are some ideas on how to do that:

  • Shop with a List. Before buying, write down what you actually need — and stick to it.
  • Ask Yourself the “Full-Price” Question. Would I buy this item if it weren’t on sale?  If not, it’s probably spaving.
  • Compare to Your Budget, Not the Discount. Focus on what you’re spending, not what you’re “saving.”
  • Wait 24 Hours Before Buying. The “cooling-off rule” — if you still want it tomorrow, it’s more likely a real need.
  • Unsubscribe from Marketing Emails. Stores use constant discounts to create urgency and tempt you to spend.
  • Track Your “Deals.” Note how often sale items actually saved you money versus when they cost you extra. The pattern can be eye-opening.

Hopefully you’re now super aware of spaving and will mainly avoid it.  If you’d like to further discuss this topic or any other financial questions that you may have, we’d be pleased to get together in a no-charge, no-obligation initial meeting.  Please visit our website or give us a call at 970.419.8212 to set up an in-person or virtual meeting.

This article is for informational purposes only. This website does not provide tax or investment advice, nor is it an offer or solicitation of any kind to buy or sell any investment products.  Please consult your tax or investment advisor for specific advice.

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National Estate Planning Awareness Month

By on October 1, 2025

October is National Estate Planning Awareness Month.  Its goal is to raise awareness about how critical it is to have a plan in place for managing and transferring assets, protecting loved ones, reducing tax burdens and avoiding complications such as probate disputes.  While many professionals recommend reviewing your estate every 3-5 years, a less in-depth annual review is prudent given changing tax laws and the many dynamics in your own life.  We have previously written several articles to help you with estate matters.  This month, we’ll give you a few tips on what to think about as you review your estate plans.

  1. Review Personal & Family Changes
    • Births, deaths, marriages, divorces.
    • Changes in relationships with heirs or beneficiaries.
    • New dependents (minor children, elderly parents, disabled family members).
    • Moving to a new state (estate planning documents are governed primarily by state law, and the rules vary).
  2. Check Your Will & Trusts
    • Confirm executors/trustees are still appropriate and able to serve.
    • Update beneficiaries or distribution wishes.
    • Ensure trusts still meet their purpose (tax planning, asset protection, special needs, etc.).
  3. Update Beneficiary Designations
    • Retirement accounts (401(k), IRA).
    • Life insurance policies.
    • Payable-on-death (POD) or transfer-on-death (TOD) accounts.  (These override your will, so they need to stay aligned.)
  4. Review Powers of Attorney & Health Directives
    • Financial Power of Attorney.
    • Healthcare Power of Attorney/Living Will.
    • Check if your chosen agents are still willing and able to serve.
  5. Inventory Assets & Debts
    • List new accounts, property, investments or business interests.
    • Remove assets you no longer own.
    • Consider digital assets (online accounts, crypto, intellectual property).
  6. Consider Tax Implications
    • Review estate, gift and income tax thresholds (federal and state).
    • Take advantage of annual gift exclusions if helpful.
    • Update plans if approaching estate tax limits.
  7. Review Insurance Coverage
    • Life insurance: still adequate for family needs?
    • Long-term care or disability insurance: still appropriate?
  8. Evaluate Charitable & Legacy Goals
    • Confirm charitable bequests still align with your values.
    • Adjust giving strategies (donor-advised funds, charitable trusts, etc.).
  9. Check Business Succession Plans (if applicable)
    • Ownership transfer, buy-sell agreements and management succession.
  10. Meet with Advisors (even a short check-in can prevent costly oversights)
    • Estate planning attorney.
    • Financial advisor.
    • Tax professional.

You’ve spent a lifetime accumulating your assets.  Surely it’s worth your time to be sure your estate plan is in order once a year.  If you’d like someone to help you review your estate plan (or get started with one), we’d be pleased to help out in a no-charge, no-obligation initial meeting.  Please visit our website or give us a call at 970.419.8212 to set up an in-person or virtual meeting.

This article is for informational purposes only. This website does not provide tax or investment advice, nor is it an offer or solicitation of any kind to buy or sell any investment products.  Please consult your tax or investment advisor for specific advice.

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2025 Tax Reform: Final Tax Provisions

By on September 1, 2025

You may have been reading about the significant federal tax law changes that have recently been passed.  They take effect over the next couple of years, but some of them (like Clean Energy Credits) start soon.  This month’s article is meant to bring you up to speed on the changes.

Permanent Extensions from the 2017 Tax Cuts and Jobs Act (TCJA)

  • Marginal tax rates: All seven TCJA individual tax brackets (10%, 12%, 22%, 24%, 32%, 35%, 37%) are now permanent.
  • Child Tax Credit: The existing $2,000 credit increases to $2,200 per child and is now indexed for inflation.
  • Pass-through business income deduction (Section 199A): The 20% deduction remains permanent under TCJA.  (This deduction allows eligible owners of certain sole proprietorships, partnerships, and S-corporations to deduct up to 20% of their qualified business income.)
  • Alternative Minimum Tax (AMT), estate/gift tax, personal exemptions, itemized deduction limits: These permanent extensions include maintaining elevated AMT exemptions, the doubled standard deduction, repeal of personal exemptions, itemized deductions preserved per TCJA rules.  (AMT is a separate federal tax system that ensures high-income individuals pay a minimum tax amount. Taxpayers subject to AMT must calculate their tax using both regular tax rules and AMT rules and pay the higher amount.)

New or Expanded Temporary Provisions (2025–2028/2029)

  • Tips deduction: Up to $25,000 deduction for qualified tip income (phases out for incomes over $150,000 — in effect through 2028).
  • Overtime deduction: Up to $12,500 (or $25,000 for joint filers) for qualified overtime pay through 2028.
  • Senior “bonus” deduction: Up to an additional $6,000 deduction for seniors (individuals 65+) which is phased out at higher Modified Adjusted Gross Income — effective through 2028.
  • Auto loan interest deduction: Up to $10,000/year deduction for interest on auto loans for U.S.-assembled vehicles, phasing out for higher-income filers — effective through 2028.
  • SALT deduction cap: Rose from the current $10,000 cap to $40,000 per taxpayer ($20,000 per taxpayer if married filing separately).  The cap is phased down after incomes exceed $500k.  It’s in effect through 2029.  (The State and Local Tax, SALT, deduction is a federal tax break that allows taxpayers who itemize their deductions to subtract certain state and local taxes from their federal taxable income. The deduction can reduce a taxpayer’s federal tax liability, especially for residents of high-tax states.)
  • Charitable deductions for non-itemizers: Up to $1,000 (individuals) or $2,000 (joint filers) in charitable contribution deductions — even without itemizing.  For itemizers, deduction is limited to contributions exceeding 0.5% of Adjusted Gross Income.   For those in the 37% bracket, the financial benefit they receive from itemized deductions is reduced to 35 cents for every dollar deducted — down from the standard 37 cents.  This begins in 2026.

Estate & Gift Tax Enhancements

  • Estate tax exemption: Elevated to $15 million for individuals ($30 million for married couples), starting in 2026 and adjusted for inflation.

Other Significant Effects & Considerations

  • Medicare and Social Security Tax: The senior deduction may reduce or eliminate Social Security taxation for about 88% of beneficiaries, but thresholds for taxing benefits remain unchanged.
  • Roth IRA Conversions & Retirement Planning: New deductions (like SALT and the $6,000 senior deductions) may lower your tax bracket and make a Roth conversion more attractive.  There are important details to understand here before proceeding.
  • Clean Energy Credits Phasing Out Early: Solar, EV and other green energy incentives expire sooner than planned under prior law.  The dates vary depending on the type of credit.

As you can see, there are quite a few changes in our tax laws.  The details matter here and can sometimes be a bit complicated.  If you’d like someone to help you understand how these changes affect you, we’d be pleased to help out in a no-charge, no-obligation initial meeting.  Please visit our website or give us a call at 970.419.8212 to set up an in-person or virtual meeting.

This article is for informational purposes only. This website does not provide tax or investment advice, nor is it an offer or solicitation of any kind to buy or sell any investment products.  Please consult your tax or investment advisor for specific advice.

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Non-Financial Reasons to Retire

By on August 1, 2025

When many of us think about retiring, we often start with whether we’re financially ready and how old we are.  We may also evaluate when Medicare will kick in.  While these factors are important to a comfortable retirement, there are a number of other reasons to consider starting the next phase of your life.  This month, we’ll take a look at some of these non-financial reasons to retire.

  1. More Time for Yourself

After years of working, you gain the freedom to focus on personal fulfillment, hobbies or just kicking back.  You can pursue passions, creative outlets or lifelong dreams without the constraints of a work schedule.

  1. Quality Time with Loved Ones

Retirement opens up time to connect with family and friends, travel with a partner or help care for grandchildren.  You can strengthen relationships that were often put on hold during your working years.  If your spouse/partner has already retired, that’s an even greater incentive to retire yourself.  Retirement can also offer you the time you want to be a caregiver for an important person in your life.

  1. Opportunity to Travel

With fewer time restrictions, you can take longer or more frequent trips — exploring new cultures, visiting family or ticking off a bucket list.

  1. Relieve Work-Related Stress

If work has been mentally, emotionally or physically taxing, retirement can greatly improve your mental health.  You regain control over your time and energy, leading to better life satisfaction.

  1. Health Considerations

If work is impacting your health or if you simply want to focus on wellness, retirement allows time for exercise, medical appointments and self-care.  You can prioritize your physical and mental well-being before age-related issues escalate.

  1. Pursue New Purpose or Volunteer Work

Retirement doesn’t mean doing “nothing” — many retirees find new purpose in volunteering, mentoring or starting a passion project.  These activities offer structure, social interaction and meaning — without the pressure of a paycheck.

  1. Lifelong Learning

Retirement is a great time to explore continued education — from university courses to personal research or certifications in areas that interest you.

  1. Avoid Burnout or Decline in Work Satisfaction

If your work is no longer fulfilling or your industry is changing in a direction you don’t enjoy, retirement offers a dignified and freeing exit.

  1. Because You Earned It

You’ve contributed years, if not decades, of your time and talents.  Retirement is a milestone of accomplishment, not just an end point.

There’s no doubt that retirement is a super important decision in your life.  According to Gallup and U.S. Census data, the average actual retirement age is around 62–64.  Indeed, the median retirement age is 62, meaning half of us retire before then and half of us after then.  Nonetheless, that’s certainly not necessarily the right answer for you.  As you evaluate retirement, it’s useful to remember what Senator Paul Tsongas said in his 1984 retirement letter, “Nobody on his deathbed ever said, ‘I wish I had spent more time at the office.’”

If you’d like someone to help you think through your retirement options, we’d be pleased to help out in a no-charge, no-obligation initial meeting.  Please visit our website or give us a call at 970.419.8212 to set up an in-person or virtual meeting.

This article is for informational purposes only. This website does not provide tax or investment advice, nor is it an offer or solicitation of any kind to buy or sell any investment products.  Please consult your tax or investment advisor for specific advice.

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Annual Insurance Review

By on July 1, 2025

Many of you know that there are two overarching principles in building your wealth.  The first is investment and growth and the second is protection of your assets.  Insurance comes into play to achieve protection.  Because of its importance, an annual insurance review is highly advisable.  Things change in life like marriage, divorce, a new child, home purchase or career shift and they can significantly impact your insurance needs.  Other reasons to review your insurance include looking for better coverage and determining whether bundling or switching companies offers worthwhile savings.  This month we’ll take a look at the more common insurance policies and some considerations when reviewing them.

Auto Insurance

  • Have you added/removed vehicles or drivers?
  • Are your coverage limits still appropriate?
  • Are you eligible for new discounts (e.g., safe driving, low mileage)?

Homeowners or Renters Insurance

  • Have you renovated or made major purchases that affect coverage needs?
  • Is your coverage keeping pace with rising rebuilding costs or inflation?
  • Do you have an up-to-date home inventory?

Health Insurance

  • Are you on the right plan (especially if using ACA marketplace or employer coverage)?
  • Has your health changed significantly?
  • Are you maximizing HSAs or FSAs?

Life Insurance

  • Do you need to adjust your death benefit (e.g., new mortgage, children or increased debt obligations)?
  • Is your beneficiary information up to date and is it consistent with your estate documents?
  • Should you convert a term policy or supplement it with another type of insurance?

Disability Insurance

  • Do you have enough income protection if you can’t work?
  • Is your policy short-term, long-term or both?

Long-Term Care Insurance

  • Are you nearing the age when LTC premiums rise dramatically? (This typically occurs around age 60.)
  • Should you consider hybrid life/LTC policies?

Umbrella Insurance

  • Do you need additional liability protection (especially if you have significant assets)?
  • Are your base auto/home liability limits sufficient to qualify for umbrella insurance?

Business Insurance (if applicable)

  • Has your revenue, employee count or service offerings changed?
  • Do you need cyber liability or professional liability now?

In addition to checking your coverage, it’s wise to compare rates regularly (many advise doing this every 2-4 years) to make sure you’re getting the best value for the protection you need.  Insurance rates vary from company to company because each insurer has its own method for calculating risk and pricing, based on a wide range of internal factors. These factors include their proprietary risk-assessment algorithms, claims experience, corporate overhead, marketing objectives and discount strategy (bundling, safe driving, low mileage, etc.).  Even with the same coverage, prices vary because insurers view and price your risk differently—and they all have unique business goals and data to back their pricing.

Whew, that’s a lot of things to review!  One good way to start, especially if one agent/broker supplies a number of your policies, is to meet with that that agent.  In a short meeting, they can advise you on any changes you might want to consider.  Additionally, we’re available to help you take a holistic view of all your insurance needs and coverage in a no-charge, no-obligation initial meeting.  Please visit our website or give us a call at 970.419.8212 to set up an in-person or virtual meeting.

This article is for informational purposes only. This website does not provide tax or investment advice, nor is it an offer or solicitation of any kind to buy or sell any investment products.  Please consult your tax or investment advisor for specific advice.

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After-Tax 401(k) vs Roth 401(k) Contributions

By on June 1, 2025

You probably already know this, but as a reminder a 401(k) is a retirement savings plan offered by many employers that allows you to save and invest a portion of your paycheck before or after taxes, depending on the type of account you choose.  (To avoid any confusion, there are also traditional and Roth IRAs that are available outside of 401(k) plans.)  Currently, there are three types of 401(k) plans:  Traditional, After-Tax and Roth.  This month we will clarify the key differences between After-Tax 401(k) and Roth 401(k) contributions.  They might sound similar, but they work quite differently, especially in terms of tax treatment, withdrawal rules and strategic uses.

Okay, let’s start with the basics.  A Roth 401(k) is a type of employer-sponsored retirement plan that combines the features of a traditional 401(k) plan and a Roth IRA plan. It’s designed to give you tax-free income in retirement, as long as certain rules are met.  Here’s how it works.  You contribute after-tax dollars (unlike a traditional 401(k), which uses pre-tax funds).  Your money grows tax-free.  Qualified withdrawals in retirement are 100% tax-free — both contributions and earnings.

An After-Tax 401(k) is a type of contribution option within some employer-sponsored 401(k) plans that allows you to contribute beyond the regular 401(k) limits using after-tax dollars (but it’s not a Roth 401(k)). It’s primarily used by high-wage earners and super-savers to maximize retirement savings and potentially do a Mega Backdoor Roth conversion (don’t worry about this right now we’ll get to it in a bit).

Let’s drill down just a bit on the key differences using this this chart.

You probably spotted that “Mega Backdoor Roth conversion” thing in the chart.  Okay, here’s the deal.  First of all, not all employers allow this in their 401(k) plan.  If yours does, a Mega Backdoor Roth conversion works by converting your After-Tax 401(k) contributions to a Roth account, allowing you to stash away tens of thousands of extra dollars into tax-free Roth savings.  Here are the steps you’ll need to take for this rollover:  Max out your traditional/Roth 401(k) (that is, hit the regular contribution limit); add your After-Tax contributions (to go beyond the limit) and then convert to Roth (to ensure future growth is tax-free).

Also, it’s worth emphasizing how the withdrawal taxes work.   After-Tax 401(k) contributions do not receive the same treatment of growth in the account as a Roth 401(k) does.  Only the contributions to the After-Tax 401(k) are tax-free.  Unless your plan allows immediate conversion to a Roth 401(k), the After-Tax gains are taxable when withdrawn.

In summary, use a Roth 401(k) if:

  • You expect higher taxes in retirement.
  • You’re younger and want decades of tax-free growth.
  • You want simplicity and qualified tax-free withdrawals.

And use an After-Tax 401(k) if:

  • You want to contribute beyond the 2025 annual $23,500 limit (plus an additional $7,500 for those 50 and older).
  • Your plan allows in-service withdrawals or conversions to Roth (enabling the Mega Backdoor Roth).
  • You have maxed out other tax-advantaged options.

You can see that under the right circumstances, an After-Tax 401(k) contribution can really help you grow your retirement account.  Some of the details can be a bit confusing, so If you’d like some help analyzing this for your situation, we’re available to talk things over in a no-charge, no-obligation initial meeting.  Please visit our website or give us a call at 970.419.8212 to set up an in-person or virtual meeting.

This article is for informational purposes only. This website does not provide tax or investment advice, nor is it an offer or solicitation of any kind to buy or sell any investment products.  Please consult your tax or investment advisor for specific advice.

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