Good News: You Can Save More for Retirement Next Year

Retirement

Good News: You Can Save More for Retirement Next Year

Posted by Infinite Wealth Advisors, LLC
12 months ago | December 3, 2018

Throughout the years, your exact plans for retirement might change in small ways or even significantly. But one thing we know for sure is that you really can’t save too much for retirement. Luckily, in 2019, the contribution limits for qualified retirement plans will increase a bit, helping you to save more for the future while taking advantage of special tax advantages.

If you have a 401(k), 403(b), Thrift Savings Plan, or certain types of 457 plans, your annual contribution limit has been bumped to $19,000 next year (up from $18,500 this year). In January, stop by your human resources office to increase your contributions accordingly.

If you’re age 50 or over, the catch-up contribution remains at $6,000 annually. Making this additional annual contribution is a good idea for everyone, but particularly those who got a late start on their planning. Catch-up contributions are subject to the same tax treatment as regular contributions.

Utilizing a 401(k) or other qualified retirement account helps you in more than just one way. In addition to saving for retirement, you can make contributions on a pre-tax basis. This means your overall taxable income for the year is lowered, by the amount that you contribute, and you won’t owe taxes on the funds in your account until you begin taking withdrawals. At that point, the money is taxed according to your income bracket (which is often lower in retirement). In other words, you can save money now, while also saving later.

As for Individual Retirement Accounts (IRAs), the contribution limit also climbs in 2019, to $6,000 per year. You can also save an additional $1,000 in that account, if you’re age 50 or older. Remember, some people fund both a 401(k) and an IRA.

If you have any questions about your retirement plan contributions, the tax structure of your account, or anything else related to retirement planning, please give us a call. Staying on top of these decisions throughout the years can help you avoid missteps and take best advantage of the opportunities available to you.

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Call 877-281-8282 or email kevin@infinitewealthadvisors.com to speak with an agent.