There are limits on what you can contribute to a 401(k), SEP IRAs and other plans of retirement.
The elective deferrals by employees cannot exceed $16,500 for 2011 and $17,000 for 2012.
For 2011, the maximum annual addition that may be made to a participant's account in a defined contribution plan may not exceed the lesser of $49,000 or 100% of the participant's compensation.
At this speed, when will you have your retirement funded.
Besides, all of these retirement funds are taxable at the time of withdrawal. The withdrawal must start at the age of 70.5 otherwise there is a 50% excise tax on it.
Some of our clients are now working on a retirement plan where they are able to contribute a lot more to their retirement with tax deductible funds. Some of them are also working on retirement plans where there will be no tax on the money they withdraw for their retirement.
There are many options available to plan your retirement in a very tax savvy way - for now and for later (when you are old) - if you are willing to look beyond the obvious and look at the many other options available in the tax code.
IRS is willing to help you if you are willing to take the help.
Let me know if you would like to know about these options
