The new year will bring changes to 401(k) and IRA accounts. These changes will allow you to save more. Here’s a list of what’s changing:
- Increased 401(k) contribution limit – The maximum you can save annually will increase from $17,000 to $17,500. These figures apply to 403(b) accounts, too.
- 401(k) fee notifications – Quarterly statements will include more information regarding fees you are paying in your 401(k) plan.
- Increased IRA contribution limit – Workers who meet the income requirement will be able to contribute up to $5,500 annually, up from $5,000.
- Increased Roth IRA income limits – Single people can contribute to a Roth IRA until they reach $112,000 in income, at which point contribution limits are decreased until income reaches $127,000. Couples can contribute to a Roth IRA until they reach $178,000 in income, at which point contribution limits are decreased until income reaches $188,000.
The 401(k), 403(b), Traditional IRA, and Roth IRA are great methods for growing your retirement nest egg. The tax advantages these retirement plans provide allow your money to grow more than in a taxable account. The 401(k) and 403(b) plans are provided by employers, but anyone with an earned income can open a Traditional IRA or Roth IRA.