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Mark Your Calendar

| December 07, 2017
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Mark your 2018 calendar to increase your retirement plan contributions starting in January.

In October, the Internal Revenue Service (IRS) published the cost-of-living adjustments affecting dollar limits for retirement plans for the 2018 tax year.

Due to a modest increase in the cost of living, as measured by the Bureau of Labor Statistics, the following items remain at 2017 levels:

  • IRA Contribution Limits
  • SIMPLE IRA Deferrals
  • Catch-Up Amounts

RETIREMENT PLANS: INCREASE YOUR CONTRIBUTION IN JANUARY
Annual maximum contributions for 401(k), Roth 401(k), 403(b), Roth 403(b), and 457 Plans increased from $18,000 to $18,500.

SOCIAL SECURITY: MORE MONEY COMING YOUR WAY
On October 13, the Social Security Administration announced a two percent cost of living adjustment to benefits – the largest increase since 2012. This adjustment will increase payments to beneficiaries by $27, on average.

The Taxable Wage Base increased by a little over one percent. This results in a $93 Social Security tax increase year-over-year for those with earned income at or above the limit. The new maximum earned income upon which social security taxes are owed is $17,040 – up from $16,920 in 2017.

One other notable increase is the amount that working retirees may earn before experiencing a decrease in their Social Security income payments. Those younger than full retirement age can earn up to $17,040, which is $120 more than the 2017 limit.  One dollar of Social Security benefits is deducted for every two dollars earned above the $17,040 limit.

The linked chart highlights the year-over-year changes for easy identification:  2018 Retirement Plan Limits.

For further reading, check out this article by U.S. News: http://bit.ly/2hNi7Ik 

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