What’s New for Retirement Plan Savers in 2018?

What’s New for Retirement Plan Savers in 2018?

The answer to that is not much, but the allowable pre-tax contributions in most traditional retirement plans will see a small increase for 2018.  Here’s what you need to know if you plan to contribute the most you can in 2018 into your pre-tax retirement accounts:

401(k)s, 403(b)s, and most 457 plans will see a $500 allowable increase for those under age 50 to $18,500.

The ‘catch-up’ provision for those older than age 50 will stay the same at $6000 for 2018.  However, if you don’t turn 50 until December 31st, 2018, the IRS will still allow you to make your $6000 extra contribution in 2018 (of course).

Defined Contribution Plan contributions will increase to $55,000.

SEP IRAs and Solo 401(k)s (for the self-employed and business owners) goes up to $1000 to a limit of $55,000 that they can contribute as an employer in 2018.  The contribution amount is a percentage of salary, so make sure you consult your tax professional on the allowable limit for 2018 before you contribute.

SIMPLE IRAs will not have an increase.  The max contribution remains at $12,500 with the catch up provision for those age 50 and older still the same at $3000 per year.

Defined Benefit Plans are for those high-earning corporate self-employed and will have an increase of $5000 to a maximum contribution limit of $220,000 in 2018.

There is a lot of adverse reporting and fear-mongering in the media about what the current administration and Congress may or may not do to pre-tax retirement savings.  Regardless of political drama that may or may not lead to IRS changes affecting savings vehicles, one thing is clear- you need to save for retirement regardless of how it may affect your taxes.  If you would like to discuss your pre-tax retirement accounts, or how drawing down your retirement savings may impact you, please contact our Las Vegas financial advisory office for a meeting.

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