Slight increases have been made due to mild inflation.
You will able to put a little more into your workplace retirement account in 2018. The federal government has boosted the annual contribution limit on some of the popular qualified retirement plans thanks to inflation and made other adjustments worth noting.
Contribution limits for 401(k)s are rising by $500. This is the first increase seen in three years. In 2018, you can direct up to $18,500 into one of these accounts; $24,500, if you are age 50 or older.1
This $500 increase also applies for three other types of retirement plans – the 403(b) plans in place at schools and non-profit organizations, the Thrift Savings Plan for federal employees, and most 457 plans sponsored by state and local governments.1
The total contribution limit for a defined contribution plan increases. A defined contribution plan is a retirement plan to which both an employer and employee can contribute. If your company has such a plan, the annual limitation on total employer/employee contributions improves by $1,000 in 2018, to $55,000.1
Contribution limits for Health Savings Accounts increase by $50/$150. You must be enrolled in a high-deductible health plan (HDHP) to have one of these accounts. The yearly contribution limit for those enrolled in individual plans rises $50 to $3,450; the yearly limit for those enrolled in qualifying family plans goes up $150 to $6,900. Correspondingly, the respective catch-up limits, which people 55 and older can take advantage of, are also heading north to $4,450 and $7,900.2
The phase-out ranges on IRA contributions are also rising. The annual IRA contribution limits are unchanged for next year ($5,500 for those under 50, $6,500 for those 50 and older), but the adjusted gross income limitations that reduce your eligibility to make IRA contributions are adjusted for inflation.1
If you are single and participate in an employer-sponsored retirement plan such as a 401(k), your new phase-out range is $1,000 higher: $63,000-$73,000. Joint filers who also contribute to workplace plans have a phaseout range of $101,000-$121,000, a $2,000 increase. If you want to contribute to an IRA and do not contribute to a workplace retirement plan, yet your spouse does, your phaseout range is $3,000 higher: $189,000-$199,000.1
Citations.
1 – benefitnews.com/news/irs-announces-2018-retirement-plan-contribution-limits [10/20/17]
2 – cbsnews.com/news/irs-allows-higher-retirement-savings-account-limits-in-2018/ [10/24/17]
This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. All information is believed to be from reliable sources; however we make no representation as to its completeness or accuracy. All economic and performance data is historical and not indicative of future results. Market indices discussed are unmanaged. Investors cannot invest in unmanaged indices. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This material was prepared by MarketingLibrary.Net Inc., for Mark Lund, Mark is known as a Wealth Advisor, The 401k Advisor, Investor Coach, The Financial Advisor, The Financial Planner and author of The Effective Investor. Mark offers investment advisory services through Stonecreek Wealth Advisors, Inc. an independent, fee-only, Registered Investment Advisor firm providing investment and retirement planning for individuals and 401k consulting for small businesses. Stonecreek is located in Park City, Salt Lake City, Murray City, West Jordan City, Sandy City, Draper City, South Jordan City, Provo City, Orem City, Lehi City, Highland City, Alpine City, and American Fork City in Utah.