Saving for retirement just got a little bit easier. According to a recent article in Kiplinger, “2018 Retirement Contribution Limits for 401(k)s and IRAs,” retirement contribution limits are increasing next year.
401(k)s: The annual contribution limit in 2018 will be increased from $18,000 to $18,500. This jump also applies to 403(b) and 457 plans, as well as the federal government’s Thrift Savings Plan. If you’re 50 or older, there is also a catch-up contribution for 401(k)s that will remain at $6,000, bringing the maximum total contribution limit to $24,500 in 2018.
IRAs: Individual retirement account contribution limits will remain at $5,500, and the catch-up contribution for people 50 or older will remain at $1,000. If you turn 50 in 2018, you can make the full $6,500 contribution any time after January 1st.
Roth IRAs: If you are filing taxes as a single or head of household, the maximum amount can be contributed to a Roth IRA, if the modified adjusted gross income (MAGI) is less than $120,000. The contribution amount will phase out completely once MAGI is greater than $135,000 (an increase from $118,000 to $133,000 in 2017).
Good news for married couples who file their taxes jointly: The maximum amount can be contributed if MAGI is less than $189,000, with the amount phasing out above $199,000, which is a nice increase from $186,000 to $196,000 in 2017.
If you have any questions about how much you should be saving for retirement, we are always happy to help. Just give us a call!