Don't Forget To Increase 401(k) Contributions With The New Year

The tax reform proposal left 401(k) tax savings mostly untouched. As you go into the new year keep these savings in mind. If you get a raise, put some or all of this extra money into your 401(k). Also remember to increase your 401(k) contributions in the year your turn 50 to take advantage of the "catch up" contributions as noted below.

Retirement plan contribution limits are indexed for inflation, but with inflation remaining low, most limits are unchanged for 2018. The only limits that have increased are for 401(k)s, from $18,000 to $18,500, and defined contribution plans, from $54,000 to $55,000. Limits for SIMPLEs and IRAs remain at $12,500 and $5,500, respectively. Catch-up contributions (for taxpayers age 50 or older) remain at $6,000 for 401(k)s, $3,000 for SIMPLEs and $1,000 for IRAs. Additional factors may affect how much you’re allowed to contribute.