Savers can put more money into their retirement accounts in 2019. IRS announced on Thursday that under annual inflation adjustments, the agency would increase the 401 (k) and IRA contribution limit for next year.
The grant of annual contributions to a traditional and Roth IRA, which has not changed since 2013, will rise to $ 6,000 from $ 5,500. The termination of these accounts for the age of 50 and over is unchanged at $ 1,000, according to the IRS . Employees participating in a 401 (k), 403 (b), most of the 457 plans, and the federal government's Savings Savings Plan will be able to raise up to $ 19,000 before taxes next year, up from $ 1
The option to add extra $ 500 each in an IRA and a 401 (k) may not look like everything so much. But it can save investors long time in the long run. For someone who begins to contribute at the age of 30 and retires at the age of 67, the additional $ 1000 a year increases to a further $ 134,000 in retirement savings with 6% return, according to Arielle Shea, an investment and retirement specialist at NerdWallet. 19659004] For people who can not come up with the extra $ 1000 to maximize both accounts, it is important to compare options when deciding to contribute to a 401 (k) or an IRA. A good rule of thumb is that if the employer offers a 401 (k) with a corporate match, try to contribute least enough to get the maximum matching dollars possible. Consider putting the rest into a Roth IRA to work for more tax-free savings for retirement.
SPONSORED FINANCIAL CONTENT
Regardless of the IRS contributions in the retirement account, investors should aim to increase the amount they submit each year, O & # 39; Shea says. A pension calculator can help you determine if you are on track.