By: Gabrielle Olya, GoBankingRates featuring Vincent Birardi, CFP®, AIF®, Wealth Advisor at Halbert Hargrove
Many high-net-worth individuals are especially adept at turning their money into even more money. While you may not be a millionaire (yet), many of their tricks of the trade can be used to boost your accounts, too.
GOBankingRates spoke with Vincent Birardi, a CFP and wealth advisor at Halbert Hargrove who works with many high-net-worth clients, to get his insights on the savings tips and tricks of millionaires.
“HNW individuals maximize their savings by capitalizing on opportunities with different accounts to earn the most they can,” he said. “From healthcare to retirement to banking, they are up to date on annual contribution limits while paying attention to small areas to earn that add up to big savings.”
Here are a few of the ways millionaires maximize their savings.
Utilize Money Market and High-Yield Savings Accounts
“Annual interest rates have perked up in recent months in line with actions taken by the Federal Reserve,” Birardi said. “You can find fully liquid money market accounts paying over 4% annually and affording $250,000 in FDIC insurance per Individual account.”
Before opening an account, look for an account that offers the best interest rate, whether it be a high-yield savings account or CD. This will ensure you are earning the highest returns on your savings. Then, keep adding to your savings by automating contributions.
“Flourish Cash and MaxMyInterest are two leading cash management programs that you can use to automate your cash savings process,” Birardi said.
Maximize Annual Retirement Plan Contributions
“A significant upside of those pesky recent elevated inflation levels is that annual contribution limits this year have increased significantly from last year,” Birardi said.
For 401(k) and 403(b) plans, the maximum contribution limit is now $22,500, and if you are age 50 or older, you can contribute an additional $7,500 for the year. Beyond making this maximum contribution, there are other tips and tricks millionaires use to boost their retirement savings in an employer-sponsored plan.
