Good News: You Can Save More for Retirement Next Year

Filed under: Retirement

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.

If you would like more information or have specific questions, please contact us using the following form. We would be happy to assist you.

This information has been provided by a licensed insurance professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting the insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax, trust and estate, or investment advice. Infinite Wealth Advisors is not an investment advisory firm.  Investment Advisory Services provided by NAMCOA® – Naples Asset Management Company®, LLC, a federally registered investment advisor, website: .