2018 Updated Contribution Limits

Advisor.Investments - July 2018

Our periodic communication that reminds you to ask, “Should I react to those headlines?”

 

2018 Updated Contribution Limits

 

            We often find ourselves being asked… What is the max amount that I can contribute this year to my retirement plan?  For that reason we wanted a handy place to turn, and thought you might want to glance at the brackets prior to yearend.

2018 maximum contributions to 401K and 403B retirement plans

            The limit has increased from $18,000 to $18,500.  If you are over 50 you may add $6,000 for catch- up funding.

2018 IRA (Individual Retirement Arrangements) max contribution limits

            The maximum amount of contribution to a traditional IRA is unchanged at $5,500.  The catch- up limit for those over 50 is $1,000.  There are phase- outs regarding IRA contributions see next section.

2018 IRA phase out information

            If either the tax payer or their spouse was covered by a retirement plan at their work, the deduction for a traditional IRA maybe phased out or eliminated.

            For single taxpayers the phase out range is now $63,000 to $73,000.

            For married taxpayers, where the spouse making the contribution is covered, the phase out range is now $101,000 to $121,000.

            For married taxpayers, where the spouse making the contribution is not covered, but the other spouse is, the phase out range is $189,000 to $199,000.      

2018 Roth IRA phase out information

            Single tax payers Roth phase out range will be $120,000 to $135,000.

            Married tax payers Roth phase out range will be $189,000 to $199,000.

             This piece is not meant to replace doing actual tax projections and research, nor a full description of the tax law regarding retirement accounts.  If you have serious financial decisions to make, we highly recommend getting with a tax professional prior to making any changes.

See you next time.

James Pope

 

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