GREENSBORO, N.C. — Inflation has made everyone's life a little harder. It's known for shrinking your money.
Experts said there's a way to make it work for you. Scott Braddock from Scott Braddock financial broke down ways to do so and how to get ahead on retirement.
Inflation Bonds
Braddock said you can put your money in an inflation bond, better known as an I bond.
I bonds interest rates are 9.62%. Here's how Braddock said they work.
- You can put in as little as $25 or as much as $10,000 into I bonds yearly.
- You have to leave the money there for a full year to get the interest.
- If you leave the money there for five years, you never pay a penalty for cashing out.
- If you take it out before five years, the penalty is just three months of interest.
The percentage changes every six months, so you'll want to buy I-bonds before the rate changes in November.
401(k)
Braddock said people sometimes leave free money unclaimed. He said most employers offer a 401(k) match.
In 2022, the most an employee can contribute to their 401(k) plans. Employers can match that contribution, as long as it doesn't go over the separate $61,000 employer-employee limit, according to Braddock.
People 50 and older might be eligible for additional contributions to their account.
IRA
Braddock said the Secure Act allows anyone to contribute to an IRA account as they long as they have an earned income.
IRA accounts do not lower someone's earned income for the year. Braddock said the funds could be tax deductible depending on what you make.
You can invest in multiple accounts. Braddock said 401(k) participants who make less than $78,000 are eligible for tax deductible IRA contributions. 2022's IRA contribution limit is $6,000.