Posted byon November 5, 2014
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The 2015 Roth IRA limits and Roth 401k contribution limits were just announced, so you can start planning your contributions. The 2015 limits will stay the same for the Roth IRA; the Roth 401k limits will increase.
The 401k limits and IRA limits are determined based on inflation, but can only increase in $500 increments. The 2015 social security wage base also increased even though there was a split between Roth 401k limits and Roth IRA limit changes.
I highlight the Roth IRA and the Roth 401k because they are my favorite retirement plans; the limits for traditional 401ks and IRAs are the same as the Roth 401k and Roth IRAs. The 2015 limits will stay the same for the traditional IRA; the traditional 401k limits will increase. In addition, the 401k limits are also the same for 403b plans and most 457 plans.
Here are the official contribution limits from the IRS:
|Roth 401k Contributions||2014||2015|
|Maximum||$ 17,500||$ 18,000|
|Catch-up 50 and over||$ 5,500||$ 6,000|
|Roth IRA Contributions||2014||2015|
|Maximum||$ 5,500||$ 5,500|
|Catch-up 50 and over||$ 1,000||$ 1,000|
You can make your 2015 contributions as early as January 1, 2015 for the whole year. If you contribute 2015 Roth IRA money between January 1 and April 15, be sure to designate calendar year 2015 if you have already contributed the maximum for 2014.
To maximize your IRA investments, make sure you aren’t paying extra fees in your IRA. You can transfer your IRA to Scottrade to avoid annual fees.
You may contribute the full amount to your Roth IRA if your 2015 modified adjusted gross income is below $116,000 for singles ($183,000 for married). You may make partial contributions until your income hits $131,000 ($193,000 for married). If your income is above that, you cannot contribute to a Roth IRA. If you are interested, there is a workaround called the Backdoor Roth IRA if your income is above the limits.
You can still make 2014 contributions before the end of the year for your 401k. The deadline for 2014 IRA contributions is April 15, 2015, the same as the tax deadline.