Changes Coming to Your 401(k) and IRA in 2018
There are a few changes coming to IRA’s and 401(k) retirement savings accounts in 2018. Contribution limits for 401(k) retirement plans are rising in 2018. Individuals will now be able to contribute a maximum of $18,500 to 401(k) accounts in 2018 if you’re under age 50. If you are over 50, you can contribute up to $24,500.
Contribution limits for traditional IRA’s will remain at $5,500 for 2018 and $6,500 for individuals over 50. If an individual does not have a workplace sponsored retirement plan, then that taxpayer may deduct the full amount of the contribution. However, individuals with an employer sponsored retirement plan, such as a 401(k), will have higher deduction phaseouts in 2018. The new phase-out ranges for 2018 are:
For single taxpayers, the deduction is phased out for those making $63,000 to $73,000, up from $62,000 to $72,000.
For married couples filing jointly, where the IRA contributor is covered by a workplace plan, the income phaseout range rises to $101,000 to $121,000, from a range of $99,000 to $119,000.
For couples where the individual contributor is not covered by a plan, but their spouse is, the income phaseout range climbs to $189,000 to $199,000 from $186,000 to $196,000.