We’re rapidly approaching the mid-point of the year, which means it’s a good time to pause for a moment and evaluate your retirement savings year-to-date. If you are participating in a retirement plan through your employer, grab your latest paystub and see what you’ve contributed in 2017. Can’t find a paystub? Contribution information is also available online through the plan sponsor’s website. If you’re not enrolled in an employer plan, and you’re contributing to an IRA or Roth IRA, do a quick calculation of what you’ve contributed this year.
The 2017 contribution limits to retirement accounts are as follows:
- 401(k), 403(b), most 457 plans, and the federal government’s Thrift Savings Plan: $18,000. The catch-up contribution limit for employees aged 50 and over is an additional $6,000 for a total of $24,000.
- IRAs and Roth IRAs: $5,500. The catch-up contribution limit for individuals aged 50 and over is an additional $1,000 for a total of $6,500.
A few reminders:
- Your ability to deduct traditional IRA contributions depends on your income and whether you or a spouse are covered by an employer-sponsored retirement plan.
|Adjusted gross income phase-out range of IRA deductibility||2017|
|Single and contributing to an employer’s plan:||$62,000 to $72,000|
|Married filing jointly when the spouse making the contribution has an employer plan:||$99,000 to $119,000|
|Married filing jointly when the contributor isn’t covered by an employer’s plan, but the spouse is covered:||$186,000 to $196,000|
|Married and covered by an employer plan, but filing separately:||$0 to 10,000|
- Roth IRA contributions are limited by income. The income phase-out range for single taxpayers and heads of household is $118,000 to $133,000. Married couples filing jointly are phased-out when adjusted gross income is $186,000 to $196,000.
In general, we believe it’s prudent for each person to save 10%-15% of their income for retirement. After your check-up, if you find you’re not reaching appropriate levels of savings, make an immediate change. Increase the percent you have withheld from your paycheck or up the amount you contribute automatically from your bank account to an IRA. Don’t wait. Take proactive steps now, before more time passes. After all, when it comes to investing and saving for retirement, the earlier the better!
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