The Internal Revenue Service has raised the contribution limits for employees who participate in 401(k), 403(b) and most 457 plans to to $18,500 in 2018, up from the current limit of $18,000.
They also increased the income ranges for determining eligibility to make deductible contributions to traditional individual retirement accounts, contribute to Roth IRAs and claim the saver’s credit.
The limit on annual contributions to an IRA remains unchanged at $5,500. The additional catch-up contribution limit for individuals aged 50 and over is not subject to an annual cost-of-living adjustment and remains $1,000. Also unchanged, at $6,000, is the catch-up contribution limit for employees aged 50 and over who participate in 401(k), 403(b) and most 457 plans, as well as the federal government’s Thrift Savings Plan.
For single taxpayers covered by a workplace retirement plan, the phase-out range is $63,000 to $73,000, up from $62,000 to $72,000, the IRS said in a release. For married couples filing jointly, where the spouse making the IRA contribution is covered by a workplace retirement plan, the phase-out range is $101,000 to $121,000, up from $99,000 to $119,000.
What does this mean for you and your retirement plans?
Example obtained from this article:
http://www.investmentnews.com/article/20171019/FREE/171019920/irs-raises-2018-contribution-limit-for-qualified-plans-to-18500
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