The IRS has announced the 2015 contribution levels for retirement accounts. Saving for your retirement next year will provide you a little more flexibility. For the past two years, the IRS has established contributions for the federal government’s Thrift Savings Plan, 401(k) plans and other comparable plans at $17,500. Which will be increased to $18,000 next year. Also, for the past two years the over age 50 catch-up threshold has been $5,500 which was also raised to $6,000.
Many people do not see contributing $18,000 as being realistic but as many people progress through their career they tend to have increased earning that can lead to increased savings. And it may become even more important for older workers to be able to save the additional $6,000 for a total of $24,000 a year. These are not necessarily significant increases, but it does represent an essential $2,000 increase in contribution levels since 2009. The limit applies to both the traditional retirement accounts as well as the ROTH accounts as long as the contributions do not exceed $18,000 for workers under 50 and $24,000 for those over the age of 50.
The IRS did not stop with employer sponsored plans with their increase for 2015. For self-employed individuals the SEP-IRA was capped at $52,000 or 25% of the income earned, whichever was less. Next year the SEP-IRA contributions will be capped at $53,000 or 25% of the income earned, whichever is less.
As for Traditional and ROTH IRA’s the IRS did not make any changes to the contribution levels for 2015. Both IRA’s are going to be capped at $5,500 for investors under the age of 50 and $6,500 for those over the age of 50.
If you have any questions of need any additional information feel free to contact me.