By Melody Hintz-Rau, VP-Employee Benefits, firstname.lastname@example.org.
No matter if you are an employee, an employer, or self-employed, knowing the best ways to save for retirement are extremely important and tax advantageous. Each year, the IRS issues the maximum available contribution and income limitations. For 2014, most of the limits have remained the same as 2013. Here is a short review of the most popular retirement savings strategies:
|Type of Plan||Employee Contribution Maximum for 2014||Employee Catch-up Contribution (over age 50)||Employee Tax Deduction Limit|
|401(k) Plan||$17,500||$5,500||25% of compensations paid to all eligible employees (maximum compensation of $260,000 and maximum total allocation of $52,000)|
|Defined Benefit Plan||N/A||N/A||Actuarial assumptions up to maximum annual benefit of $210,000|
|403(b) Plan||$17,500||$5,500||Employer and employee contributions not more than 100% of compensation or $52,000|
|457(b) Plan||$17,500||$5,500||No Limit|
|SEP IRA||$5,500||$1,000||25% of compensations paid to all eligible employees (maximum compensation of $260,000 and maximum total allocation of $52,000)|
|SIMPLE IRA||$12,000||$2,500||Match of $1 for $1 up to 3% of compensation|
|Traditional IRA *||$5,500||$1,000||N/A|
|Roth IRA *||$5,500||$1,000||N/A|
|*IRA Income Limitations||Traditional IRA Deductions Phaseout Ranges||Roth IRA Eligibility Phaseout Ranges|
|Married filing jointly, both active participants in a retirement plan||$96,000-$116,000||$181,000-$191,000|
|Married filing jointly, one active participant in a retirement plan||$181,000-$191,000||$181,000-$191,000|
Please consult your tax advisor for additional information and eligibility.
If you have any questions contact BNC Wealth Management today to discuss what we can do for you.