Most working professionals have access to a 401(k) plan or a 403(b) plan at work.? Amounts contributed to these plans generally reduce your taxable earnings and always grow tax deferred.?You can contribute up to $18,500 into a 401(k) or 403(b) plan through salary deferrals in 2018.
Anyone 50 or older by December 31, 2018 can contribute an extra $6,000 into their 401(k) or 403(b) plan through salary deferrals next year, for a total annual contribution of $24,500.? That is an increase of $500 over what was allowed during 2017.
Many smaller employers offer their staff access to SIMPLE/IRAs instead.? SIMPLE’s work just like 401(k) plans, which means it’s up to you to fund the bulk of this retirement savings account through salary deferrals.? For 2018, the maximum contribution into your SIMPLE remains at $12,500.? Anyone 50 or older by December 31st can sock away an additional $3,000 in 2018, for a total annual contribution of $15,500, unchanged from 2017.
And if you are self-employed,?you can contribute up to 20% of your net self-employment income into a SEP IRA.? The maximum contribution into your SEP IRA for 2018 increases to $55,000, up $1,000 from 2017.
Re-Set Your 2018 Budget:? Most people won’t be able to max out these tax-advantaged retirement options unless they get on a budget and put away a set amount of money each month.? With 2017 winding down, now’s the time to start thinking about resetting your monthly retirement savings goals for 2018.
2018 Maximum Retirement Account Contributions:
Retirement Savings Option
Under the age??of 50
50 or older by December 31st
401(k) or 403(b) deferrals
SIMPLE IRA deferrals
IRA or Roth IRA