Great question!
Do your employers offer 401(k) plans? If so, traditional 401(k) plans allow you to contribute up to $24,000 if under age 50. These contributions are "pre-tax" meaning that they will reduce your taxable income. If over age 50, there is an additional "Catch-up" contribution amount of $8,000 you could claim, however, if you earned more than $150,000 in 2025, those catch-up contributions have to be made to a Roth 401(k), which does not reduce taxable income.
Another way to reduce taxable income is by contributing to a Health Savings Account. If your employer offers a High Deductible Health Plan, you can make contributions to a Health Savings Account up to $4,400 per year for individual plans or $8,750 for family plans. There is also a "catch up" contribution with these plans: An additional $1,000 per year may be contributed if aged 55 or older. Health Savings Accounts have what is called the "triple tax advantage":
- Contributions to the Health Savings Account have no tax assessed on them at contribution
- Money in an HSA can be invested and the growth on the investments is tax deferred
- Withdrawals from the HSA are also tax-free, provided that they are used to pay for medical expenses
The HSA is also another good vehicle for retirement savings as the funds are yours even if you no longer have HDHP insurance.
**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
