Many aspects of tax planning apply for all clients no matter their age, but younger clients often require specific strategies, advisors say.
Part of the issue is that many younger tax filers are making more money than they used to.
Clients in mid-career with higher incomes should max out retirement accounts and be mindful of tax brackets, said Eric Herzog at Prime Capital Investment Advisors in Fargo, N.D., especially the deductions for contributions if a client is nearing the next marginal income tax bracket.
Younger clients must also avoid lifestyle creep, advisors said. “When [the client] gets a raise, sell a business or just find yourself with more money, it is easy to spend more,” Herzog said. “Systematize saving by investing a preset dollar amount or percentage of income.”
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