Craig Wear, CFP®Craig Wear, CFP® | Expert in Roth Conversions & Tax-Efficient Retirement Strategies for IRA Millionaires

Maximizing Retirement Savings

21 Jun 2024 · 0 min

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Brief advisory segment from Craig Wear, CFP® about retirement savings strategy late in a career: he warns against making large 401(k) contributions in the final working years as a catch-up strategy and instead recommends using the same cash to "make up for all the lost contribution years" and to convert several times that amount (i.e., use the cash to perform conversions) rather than continuing to increase 401(k) balances.

If you're in your last few years of working and you're making large contributions to the 401k, that's probably not your best strategy. It's probably a better strategy to use that cash that the same cash that you were putting in making up for all the lost contribution years into your 401k. It's better to use that cash and actually convert four or five times that amount than to continue making the problem bigger.