Tag: retirement

[Updated with latest Roth IRA limits] The latest income phase out ranges for the deductibility of Roth IRA contributions are shown in the table below. Contribution limits have marginally increased over the last few years while income threshold limits to get a contribution tax deduction have been adjusted in line…

Every year around November when the IRS publishes updated 401k plan limits for the year ahead I set myself a goal to see how fast I can reach the maximum contribution limit. I am fortunate that I earn and save enough money to make the maximum pre-tax retirement account contributions, but…

"Can I Contribute to an IRA, Roth IRA and a 401K if I have access to all these accounts? What are the limits and rules of doing so?" This is the kind of question I get fairly often and one that I actually had to recently sort out for myself. To determine…

In this article we will discuss Retirement Plan Contributions and Conversions and how these can reduce your taxable income in the current tax year. The last business day of 2016 is December 30th, so there is still time to make changes to your contributions to achieve the greatest reduction in your…

It's not breaking news that you should be saving for retirement. Most employed people understand this fact, so hopefully, you are setting some cash aside for your golden years despite your day to day living expenses. The tricky part of retirement financial planning is figuring out how much you should…

[2017 COLA update] Its been a few years with relatively minor COLA (cost-of-living-adjustment) increases but even with the marginal 2017 COLA increase of 0.3%, over 12 million Americans will pay higher taxes in 2017 as the maximum taxable earnings (wage base) subject to social security also increased from $106,800 to $110,100. You can see the previous…

I regularly receive reader questions asking me to clarify the difference between a Roth IRA and Traditional IRA plan. Both are excellent retirement investment vehicles, but based on your income and tax situation one may be a better first choice than the other. Shown below is a table with some key differences…

The IRS has released its latest individual employee contribution annual limits for those participating in employer sponsored retirement programs covering 401(k), 403(b), 457 and Government Thrift Savings (TSP) plans. Changes are shown in the table below. The contribution limits are indexed to inflation and as a result are adjusted annually by the…

[Updated with latest details per the IRS] The savers credit helps middle to lower income earners save for retirement by providing a tax credit offset to retirement plan (401k and IRA) contributions. But a lot of people don't know about or take advantage of this little known credit, officially referred to by…

Target date funds are mutual funds that are professionally managed with asset allocations and risk profiles set to change along a glide path reflecting your target retirement date. For example you would be buy a 2050 target date fund if you expect to retire around the year 2050. Or put…

A Roth IRA can provide a great way to build up savings for retirement. These accounts allow funds to grow on a tax-free basis. And, provided that the account owner meets just a few requirements, all the money contributed and earned in a Roth IRA account may also be withdrawn without…

After several years the IRS has raised Roth IRA contribution levels, along with the annually indexed income qualification levels that allow eligible contributions. This is good news for those looking for tax effective ways to manage their retirement savings. [See this article for the latest Roth IRA limits] Unlike 401(k) and Traditional…

Being the finance wonk that I am, I rather enjoy reading some of the tax advice that the big accounting firms put out for their clients. While their target audience (based on their $250 to $500 hourly fee) is clearly higher net worth individuals, you can glean some pretty useful…