IRS Increases 401(k) Contribution Limits

Key Takeaways401k-plan

  • The IRS just announced new incentives to help those saving for retirement combat inflation.
  • Starting in 2015, retirement plan participants will be able to contribute up to $18,000 annually to their 401(k), 403(b), Thrift Savings Plans and most 457 accounts.
  • Savers age 50 and over will be able to contribute up to $24,000.

Great news for disciplined savers. The IRS is giving you a break. OK, it’s an incentive, really, but still good news for those who are consistently saving for retirement—or hoping to get back on track.

In a move to help bolster retirement plan savings and keep good on a pledge to periodically adjust for inflation, the IRS has increased 401(k) contribution limits for 2015.  In plan year 2015, retirement plan participants will be able to contribute up to $18,000 to their 401(k), 403(b), most 457 plans and Thrift Savings Plans (for federal employees).  Savers age 50 and over will be able to contribute up to an additional $6,000 in catch-up contributions.  This ups the annual total including catch-up contributions to $24,000.  IRA annual limits will remain the same in 2015 however, at $5,500 with catch-up contributions for those over 50 at $1,000.

This article by Motley Fool’s Chuck Saletta is a powerful reminder about why investing in your retirement plan is so important.

If you have questions about a 401(k), other retirement plan, or bringing clarity to your financial goals, please contact me to have a discussion.

 

About Chas Boinske

Charles P. Boinske, CFA, is a 30 year investment management veteran overseeing the strategic direction and portfolio management process for Independence Advisors, LLC. Have a question for Charles? CLICK HERE TO ASK CHARLES