The contribution limit for employees who participate in 401(k), 403(b), most 457 plans, and the federal government’s Thrift Savings Plan is increased from $18,500 to $19,000.

Contribution limit for a Traditional IRA is $6,000. Taxpayers can deduct contributions to a traditional IRA if they meet certain conditions. If during the year either the taxpayer or their spouse was covered by a retirement plan at work, the deduction may be reduced, or phased out, until it is eliminated, depending on filing status and income.

Contribution limit for Roth IRA is $6,000. Taxpayers eligibility in contributing to a ROTH IRA depends on their income. The income phase-out range for taxpayers making contributions to a Roth IRA is $122,000 to $137,000 for singles and heads of household, up from $120,000 to $135,000. For married couples filing jointly, the income phase-out range is $193,000 to $203,000, up from $189,000 to $199,000. The phase-out range for a married individual filing a separate return who makes contributions to a Roth IRA is not subject to an annual cost-of-living adjustment and remains $0 to $10,000.

Consult with your tax advisor or contact us to see if you are eligible.

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Retirement Options for Employees: Secure Your Future

Retirement is a crucial phase of life that everyone looks forward to. It is a time where individuals can finally relax and enjoy the fruits of their lifelong hard work. However, to ensure a comfortable retirement, employees need to carefully plan and explore various retirement options available to them. In this article, we will discuss some of the retirement options for employees to secure their future.

1. Employer-sponsored retirement plans: Many companies offer employer-sponsored retirement plans to their employees, like the 401(k) or pension plans. These plans allow employees to contribute a portion of their salary towards retirement savings, which is usually tax-deferred. Some employers even match the employee’s contributions, making it an attractive option. It is advisable to take full advantage of such plans as they provide a disciplined approach to saving for retirement.

2. Individual Retirement Accounts (IRAs): IRAs are another popular retirement option available to employees. They are individual savings accounts that offer various tax advantages. There are two main types of IRAs: traditional IRAs and Roth IRAs. Traditional IRAs allow individuals to contribute taxable income towards retirement savings, and the contributions are tax-deductible. On the other hand, Roth IRAs require individuals to contribute after-tax income, but the withdrawals during retirement are generally tax-free. Choosing the right type of IRA depends on factors such as current tax bracket and expected future tax implications.

3. Social Security: Social Security is a government-sponsored retirement program that provides financial benefits to retired individuals. Employees contribute a portion of their earnings towards Social Security throughout their working years, and upon reaching retirement age, they become eligible to receive monthly benefits. Although these benefits may not be sufficient to cover all expenses, they do serve as a foundation for retirement income. It is essential to understand how Social Security works and its potential impact on your retirement income to make informed decisions.

4. Annuities: Annuities are insurance products that offer a guaranteed income stream during retirement. They can be purchased either through an employer-sponsored plan or individually. Annuities can provide a fixed income for life or a specific period, which can be comforting for retirees who want a stable source of income. However, it is important to carefully evaluate the terms and conditions of the annuity and consider factors such as fees, surrender charges, and inflation protection.

5. Personal savings and investments: Besides retirement plans and government programs, it is crucial for employees to take initiative and save for retirement on their own. Building personal savings and investments through various avenues such as savings accounts, mutual funds, stocks, and real estate can supplement other retirement options and enhance financial security. Starting early and maintaining a consistent saving habit can significantly impact the retirement nest egg.

While these retirement options are available to employees, it is advisable to seek guidance from financial advisors or professionals to determine the most appropriate strategies based on individual circumstances. Retirement planning requires careful analysis and regular assessments to ensure that employees are on track to meet their financial goals and enjoy a comfortable retirement. Remember, securing your future starts with proactive retirement planning today.