Hi MoneyStuff Community,
It’s been a while! We are now well underway into 2019 and there are a few financial changes I’d like to point out for the new year:
Each year, the IRS reviews the annual limits for retirement accounts. In other words, they determine how much of your income they’re willing to not tax this year, but instead tax it at a later point. Blah, blah blah…. So what’s changed and how does it impact YOU?
- Roth IRA limits increased from $5500 to $6000 for the year. So, if you’re going to max out your Roth IRA contribution for the year (an awesome goal to have), contribute $1k six times, $6k one time, or $500 each month. It’s really up to you. Not everyone is eligible to contribute to a Roth IRA…. So check the income limits to see if you can, or if you’ll need to contribute to a traditional IRA instead (then you can do a backdoor conversion).
- 401k employee contribution limits increased from $18,500 to $19,000. If you make $100k per year, deferring 19% of your pre-tax income will max you out. This doesn’t include employer matching contributions, which many 401k plans have.
Which brings me to a good reminder:
Contribute enough to your 401k to maximize the employer match!!! If your employer will match 100% of your first 4%, contribute AT LEAST 4%. Get your free money!! If they will match 1/2 of the next 2%, contribute AT LEAST 6%. You get the point.
Reach out with any questions you may have. Some common ones include:
- How much should I be contributing to a Roth IRA?
- How much should I contribute to my 401k?
- What’s the difference between a Roth IRA, IRA, and 401k?
- Who’s going to win the Super Bowl?
- How/when should I do my taxes?
With a clean slate ahead of you, its a great time to make some savings goals. Not only HOW MUCH you’ll save, but WHERE you’ll save it. What accounts, how it will be invested, etc. can turn your savings plan from good to great.
Let’s Get This Bread.
-David
MoneyStuff 