- Posted by sfg2020
- On November 29, 2018
- 0 Comments
Updated by Brian L Spahr, SPAHR FINANCIAL GROUP LLC on January 28, 2020 -(original post 11/29/2018)
2020 HIGHLIGHT SUMMARY.
- Employ every advantage to grow wealth by using correct retirement plan(s).
- Vital numbers to know: $6,000, $13,500, $19,500, $57,000.
- Start immediately, progressively raise contributions to reach maximum.
- Aim to save 10% of your gross income at minimum.
Every year, the IRS provides the updated limits and contribution amounts for retirement plans. I cannot overstate the importance of contacting our office for any questions regarding your specific situation and how you can improve your odds of success. I remain optimistic it is possible to raise your awareness on the substantial opportunity you have by participating in retirement planning starting as early as possible.
Retirement planning, primarily through tax-deferred accounts, continues to offer monumental advantages for growing your wealth and providing income later in life. The benefits are twofold, first having your contributions grow tax-deferred and second by using pre-tax monies which reduce your taxable income. Based on the potential growth and benefits, you should be funding any/all plans you are eligible for, to the maximum your cash flow allows.
Most individuals fall in the category of having an employer sponsored plan such as a 401(k)/Profit Sharing plan, 403(b), 457(b), or Thrift Savings Plan (TSP), and the opportunity to also contribute to a personal plan such as a Traditional/Roth IRA. In order to determine the exact allowable plans and the amounts you are eligible to utilize we must review your specific parameters and then examine in depth.
The many factors which require extensive review include but are not limited to: if you are covered by a retirement plan at work, your tax filing status, your income, and other factors. To guide you in determining the optimal planning we are here to help, as retirement planning & employee benefits are a scope of engagement for Certified Financial Planners. In addition you should always consult your tax advisor as they are your primary source for tax advice.
The 4 numbers that you should absolutely know and the plans they represent are as follows.
$6,000 is the Traditional/Roth IRA contribution limit. If over age 50, the additional catch up provision is $1,000.
$13,500 is the new SIMPLE IRA contribution limit, with an additional catch up provision of $3,000.
$19,500 is the new Elective Deferral Limit, for plans such as 401(k), 403(b), TSP, 457(b), with a catch up provision of $6,500.
$57,000 is the new IRC 415(c)(1)(a) Defined Contribution Limit, for SEP IRA, 401(k)/PS combinations, with a catch up provision of $6,500.
You should start retirement planning at the earliest age possible, as the time value coupled with tax-deferred growth is remarkable. You should attempt to save at least 10.00% of your earned income and continue to increase that number over time.
For additional information please contact SPAHR FINANCIAL GROUP and visit > https://spahrfinancial.com/
Brian Spahr, CFP® / SPAHR FINANCIAL GROUP, LLC
Investment Advisory – Risk Management
Providing Advice We Use