Stashing all your savings in tax-deferred accounts<\/p>\n
\ufeffTraditional 401(k)s or individual retirement accounts (IRAs) incentivize you to save in two ways: Since contributions are tax-deductible, they lower your taxable income in the years you make them, and the money you invest grows tax-deferred. However, relying solely on such accounts can lead to big tax bills<\/a> when you begin making withdrawals in retirement, cautions Jean Keener, principal of Keener Financial Planning in Keller, Texas.<\/p>\n \u201cPeople will max out these plans \u2014 and it does save a lot of money in your working years \u2014 but if you do that exclusively, sometimes that ends up being a mistake,\u201d she says, citing the IRS\u2019s rules for required minimum distributions<\/a>, or RMDs. These are mandatory withdrawals from tax-deferred retirement accounts that, for people born in 1960 or later, start at age 75. That money is taxed at regular income rates<\/a>.<\/p>\n Diversification can help reduce the tax sting. If you\u2019re still working, consider contributing some after-tax dollars to a Roth 401(k)<\/a>. According to the Plan Sponsor Council of America, more than 95 percent of 401(k) plans also offer a Roth option. Since taxes have already been paid on Roth 401(k) contributions, you can make tax-free withdrawals in retirement. You can reap the same tax gains by opening a personal Roth IRA and making regular after-tax contributions.<\/p>\n Not taking advantage of catch-up contributions<\/p>\n A 2025 survey from investment company Schroders found that only 16 percent of Gen Xers think they have enough money to retire<\/a>. One way to shore up your savings is to take advantage of \u201ccatch-up\u201d retirement account contributions, says Matteo Hoch, founder and financial adviser at Bird Spring Financial in Las Vegas.<\/p>\n In 2026, most workers age 50 and older can make an additional $8,000 in 401(k) contributions<\/a> on top of the standard contribution limit of $24,500. (People who earned more than $150,000 in 2025 are required to make those catch-up contributions into a Roth account.) For both traditional and Roth IRAs<\/a>, retirement savers age 50 and older can contribute an extra $1,100 as a catch-up contribution on top of the $7,500 IRA cap.<\/p>\n Investing too conservatively<\/p>\n In the years before you retire, putting too much of your money into low-risk investments such as certificates of deposit (CDs) or money-market accounts could hurt your ability to build a long-lasting nest egg. \ufeff<\/p>\n","protected":false},"excerpt":{"rendered":"Stashing all your savings in tax-deferred accounts \ufeffTraditional 401(k)s or individual retirement accounts (IRAs) incentivize you to save…\n","protected":false},"author":2,"featured_media":763610,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[39],"tags":[28,66513,326626,140651,53089,147,530,151920],"class_list":["post-763609","post","type-post","status-publish","format-standard","has-post-thumbnail","category-personal-finance","tag-business","tag-financial-mistakes","tag-gen-x-finances","tag-gen-x-retirement-savings","tag-money-mistakes","tag-personal-finance","tag-personalfinance","tag-retirement-mistakes"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/763609","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/comments?post=763609"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/763609\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media\/763610"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media?parent=763609"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/categories?post=763609"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/tags?post=763609"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}