BP Professionals Can Save Over $55,000 In The ESP in 2020
Use Your Benefits to Lower Your Taxes
Key Summary: The benefits offered to BP executives play a key role in how you should be planning to save for retirement. Understanding what BP contributes, how to get the most from it, and how to use these benefits in your financial planning strategy is crucial to ensuring no money is left on the table. With the annual release of IRS 415a limitations ($285,000 for 2020) , it's important to re-calculate your contributions to the various sources in your ESP each year to ensure that you're maxing it out. If your income exceeds these limitations in a calendar year, it's important to frontload your contributions to a 401(k) before being prohibited from doing so. Between the various sources within your ESP (pre-tax, after-tax, and Roth) and the contribution from BP, you can get $63,500 (if over age 50, or $57,500 if under age 50) into retirement savings this year.
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John Siegel, CFP®
Willis Johnson & Associates is a registered investment advisor. Information presented is for educational purposes only. It should not be considered specific investment advice, does not take into consideration your specific situation, and does not intend to make an offer or solicitation for the sale or purchase of any securities or investment strategies. Investments involve risk and are not guaranteed. Be sure to consult with a qualified financial advisor and/or tax professional before implementing any strategy discussed herein. Corporate benefits may change at any point in time. Be sure to consult with human resources and review Summary Plan Description(s) before implementing any strategy discussed herein. Willis Johnson & Associates is not a CPA firm.