fosamax buy online The contribution limits for various retirement plans such as 401(k) plans have changed for 2018. The amount you can save for these accounts has gone up. Other retirement accounts have remained the same.
Here are the new limits for 2018:
Contribution limits for 401(k), 403(b) and 457 plans Rise
The annual limit on contributions for 2018 has been raised $500 to $18,500.
If you’re 50 or older (even if your 50th birthday falls on Dec. 31, 2018), you can also make an additional $6,000 contribution into your savings plan and accounts, for a total annual contribution of $24,500.
The maximum for profit sharing contributions and defined contribution plans has been increased $1,000 to $55,000. For individuals 50 and over, the maximum limit is now $61,000. This can be especially advantages for solo 401(k) plans. If you have any questions about these new plan limits or how to set up a 401(k) plan, we can help!
New income limits for IRA contributions
The limit for contributions to IRAs remains unchanged for 2018. For those under age 50 who have earned income will stay at $5,500 for 2018. This limit applies to any type of IRA in 2018. Individuals 50 and older in 2018 can make an additional catch-up contribution of $1,000, for a total annual IRA contribution of $6,500.
However, the IRS did increase the income levels used for determining eligibility to make deductible contributions to traditional IRAs, contribute to Roth IRAs and even to claim the Savers Tax Credit.
Single taxpayers who are eligible to participate in a workplace retirement plan are also eligible to make a tax-deductible contribution to an IRA if their adjusted gross income is below $63,000 (or $101,000 for married couples) in 2018. This was raised from $62,000 (single) and $99,000 (married) in 2017. This deduction is phased out when AGI falls in the range of $63,000 to $73,000 (singles) and $101,000 to $121,000 (for married couples).
The income range for making contributions to a Roth type IRA in 2018 is $120,000 to $135,000 (singles and head of household) and $189,000 to $199,000 (marrieds).
In 2018, the income limit for the savers tax credit (also called the “retirement savings contributions tax credit”), which is a tax credit for low- to middle-income workers who contribute to a retirement plan or IRA, is $63,000 for married workers (up from $62,000), $47,250 for head of household and $31,500 for single filers (up from $31,000). For individuals falling within this range, you can take advantage of IRA deductions and credits making an IRA account a no brainer.
New contribution limits for health savings accounts, or HSAs
The 2018 annual contribution limit that individuals with single medical coverage can contribute to a health saving account is $3,450, an increase of $50 from 2017. The annual HSA contribution limit is $6,900 for those covered under qualifying family medical plans (up from $6,750 in 2017). But if you’re 55 or older in 2018, you can contribute an additional $1,000, or total of $4,450 to an HSA for singles and $7,900 for families per year.
In addition to the tax savings from using an HSA to cover unreimbursed medical costs, an HSA can be withdrawn without penalty in retirement.
Speak to a trusted advisor about how you can benefit from these changes, and to ensure you’re prepared for your own retirement.