ReShelle Barrett, CFP®
Nobody wants to think of filing tax returns at this time of year but the following limits should help in planning for your 2018 retirement account contributions. There is plenty of time to make IRA/Roth contributions (April 15, 2019 is deadline for 2018 contributions) but if you are trying to maximize your 401(k) contributions, you have almost exactly 6 months to make sure you do.
Traditional and Roth IRAs
- 2018 $5,500 per year
- 2018 $1,000 additional per year for investors who are at least age 50 by the end of the tax year
- 2018 $12,500 per year
- 2018 $2,500 additional per year for investors who are at least age 50 by the end of the tax year
401(k), 403(b), 457 and SAR-SEP Plans
- 2018 $18,500
- 2018 $6,000 additional for investors who are at least age 50 by the end of the tax year
Income Limits for Roth IRA Contributions
You are Roth IRA eligible if you have taxable compensation and your modified adjusted gross income (AGI) is less than:
- $189,000 – $199,000 for married filing jointly or a qualifying widow(er)
- $120,000 – $135,000 for single, head of household or married filing separately and you did not live with your spouse at any time during the year
There is no income limit for Roth IRA Conversions
Income Limits for Deducting IRA Contributions
- Although anyone with earned income can contribute to a traditional IRA, the deduction you can take for your contributions depends on whether you or your spouse was covered for any part of the year by an employer sponsored retirement plan. Your deduction is also affected by the amount of your income and by your filing status and may also be affected by any social security benefits you received.
So, if you are trying to maximize your retirement savings funds in a tax-sheltered account, consider increasing your contributions as close to the maximum as possible.