How Much Can You Save in 2017?

At the turn of a new year, how are you feeling about your retirement savings? Whether or not you were able to stash the maximum allowable amounts in your retirement fund last year, 2017 brings a brand new opportunity. To best prepare for your eventual retirement, you should be trying to reach that maximum contribution amount each year. But of course, the first step is learning those limits, so that you can budget appropriately for savings.

Individual Retirement Account (IRA). There are two types of IRAs, Traditional or Roth, and you might choose one or the other based on whether you want to establish taxable or non-taxable income in retirement. Some people choose to open and fund both types of accounts. Whatever you decide to do, the contribution limit for both types of IRA remain at $5,500 for 2017. If you’re age 50 or over, you can also make an additional catch-up contribution of $1,000.

One important thing to remember is that this limit will apply to both types of account, if you contribute to both an Traditional and IRA. That means your total contribution limit is $5,500 (or $6,500) for the year. . It’s up to you how you will split that money between the accounts.

Employer-sponsored retirement plans. The contributions limits for 401(k), 403(b), 457, SAR-SEP, and federal Thrift Savings Plan accounts remained unchanged for 2017. You can contribute up to $18,000 to these plans during the year, plus an additional $6,000 catch-up contribution if you’re age 50 or older.

For those of you who have SIMPLE plans, the contribution limit for 2017 is $12,500, plus a $3,000 catch-up contribution for those who have reached age 50.

As always, retirement planning consists of much more than contributing to an account. If you’re maxing out your contributions, then you’re on the right track to a secure future. But you’ll face many more decisions along the way, so give us a call to schedule an appointment. We can help you analyze your financial abilities and priorities, and then together we will craft a plan for success.