This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

How To Optimize Your Retirement Investing Priorities

At the same time, the economy might require higher tax rates in the future. We're benefiting today from the lowest tax rates in American history. This might be the time to pay taxes if you think the economy has no way to survive without higher tax rates in the future. The concept of favorable tax rates on long-term capital gains might disappear. And if you save and invest diligently, you may be able to generate more income than you expect.

There is a strong case for believing that the tax you're paying today might be the lowest rates you'll ever pay. Take advantage of that by investing in a Roth IRA. You don't get a tax deduction like you would with a traditional IRA, but you won't need to pay tax on your contributions or your earnings when you withdraw your Roth IRA funds in retirement. There's another assumption inherent in this: that the law surrounding Roth IRAs doesn't change.

Priority 3: Maximize contributions to your 401(k)

If you've maximized your Roth IRA, look back at your 401(k). By contributing more to your 401(k), you can take advantage of the tax benefits already mentioned. Because you already maximized your employer's matching contribution, the only benefit left is the tax deduction and tax-free growth of your investment. This is still something to take advantage to lower your tax bills today and throughout the rest of your income-earning life.

Not every employer offers a 401(k). The non-profit I used to work for eventually offered a similar plan, a 403(b), with the same benefits, but other employees might not be so lucky. If a 401(k) isn't available, you can fall back on a traditional IRA. Rather than investing the full $5,500 into a Roth IRA, split your total contribution between the Roth IRA and a traditional IRA. With a traditional IRA, you receive a tax deduction (subject to income limitations) and tax-free growth, like a 401(k).

2 of 4

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,685.80 +328.93 1.90%
S&P 500 2,049.14 +36.25 1.80%
NASDAQ 4,729.6280 +85.3160 1.84%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs