Arm yourself to save more for your retirement in 2019!
The Treasury has announced inflation-adjusted numbers for retirement savings for 2019, as well as a lot of changes that will help investors stuff these accounts.
The amount which you could contribute to an Individual Retirement is being bumped from $5,500 up to $6,000 for 2019. Also, the amount you can contribute to your 401(k) (or similar workplace) retirement plan goes up from $18,500 in 2018 to $19,000 in 2019.
That means that quite a few high earners and super-savers age 50-plus can sock away $32,000 during these tax-advantaged accounts. If your hiring manager allows after-tax contributions possibly you’re self-employed you can save double. The overall defined contribution product limit moves up to $56,000, from $55,1000. People who are over 50 and working can save up to $7,000 with the new contribution limit in place according to Market Watch.
Do these limits tend to be unreachable? During 2017, 13% of employees with consideration plans at work saved the maximum of $18,000/$24,000, according to the Vanguard’s Strategies America Saves study. In opportunities offering catch-up contributions, 14% of those age 50 and older took advantage of the savings opportunity. The amount you should set aside will relate to how you want to live after retirement. Survive on the just the basics or play golf every day. It‘s something each person will need to decide when setting up or making adjustments to their retirement account.
The annual contribution limit for workers who participate in 401(k), 403(b), most 457 plans, as well as federal government’s Thrift Reserves Plan, is $19,000 for 2019, a $500 increase over 2018. You will need to elect the change to your 401(k) which some employers send you an indication to update your elections for the plan year. You should take that time to evaluate and make necessary changes as needed.
Strengthening the 401(k) contribution is great for savers, but not everyone takes advantage of it. About 10% of participants, according to Vanguard, maxed out their 401(k) in 2016.
If you need guidance on your retirement savings plan or to get started, we are here to help.