There are rules to the road when it comes to saving for retirement. The more you know about them, the more you can prepare yourself for how to adapt to what is coming next. A few of the changes that are coming for 2018 are things that might surprise you if you are not otherwise adequately prepared for them.
David Giertz has a beat on what some of the changes for 2018 are and why they matter. He has more than thirty years of experience in finance and has always looked to leverage strategies to help those who follow him. His latest endeavor has been as the President of Nationwide Financial’s sales and distribution network. He grew that business up from $11 billion to $17.6 billion in his time there.
I just published “How to Make the Most Out of Social Security” https://t.co/ZNofHMvadW
— David Giertz (@david_giertz) December 14, 2017
David Giertz is a certified business coach and has gone on to help certify more than one-hundred other people to become business coaches as well. He wanted to make sure that the gifts that he was given were something that he could pass on to others who wanted to follow in his footsteps. David Giertz has left a big footprint on the retirement and financial industry, and he continues to offer very insightful and helpful advice.
One nice perk for those who have access to 401(k) funds at their work can take advantage of deductions on their tax filings. They have always been able to essentially write off some of those contributions says David Giertz. Once a person hits a certain level of income, they are phased out of these deductions until they actually disappear entirely. This is important because those limits have been changed for 2018, and not in your favor.
The new phase out ranges are as follows:
- Single Or Head Of Household: $63,000-$73,000
- Married Filing Jointly: $101,000-$121,000
- Married Filing Separately: $0-$10,000
These are important to pay attention to if you had the idea of deducting at least some of your IRA contributions from your taxes.
The Roth IRA
A Roth IRA is perhaps the most powerful type of retirement account in existence. It is something that allows a taxpayer to avoid taking a huge tax hit when they go to cash out their retirement account. Instead, they only pay the taxes before they enter their retirement account. In other words, the money contributed to their account only comes into play after it has already been taxed by the employer.
The taxes taken out by an employer are far lower than those that would be drawn out by the government at the time of withdrawal of the retirement money (post age 65 in most cases). Therefore, a Roth IRA can save the retiring individual a huge amount of money on taxes in comparison to the traditional IRA.
Income limits are set on the ability to contribute to a Roth IRA every year. If you make more than the limit, then you are not allowed to contribute to a Roth. Those limits are increasing ever so slightly in 2018.
A single individual may earn an income up to $120,000-$135,000 annually (the amount is phased out between those ranges) and still contribute to a Roth IRA. If you are married and filing jointly, your income can be as high as $189,000-$199,000 per year. For those who are married and yet filing separately, their range is still just $0-$10,000.
Many of us also hold 401(k) accounts. This is not necessarily because they are always the most logical choice, but because they tend to be what is offered by our employer. Thus, it is good news for many to hear that the contribution limit to these accounts has now increased to $18,500 in 2018.
This is a number that continues to rise over the years, but it is always nice to hear that it is going up just a little bit more. This means that those who take advantage of this program through their employer may be able to enjoy a little bit of extra money in their retirement funds with each paycheck.
Pull all of these treads together and you can see how 2018 is shaping up in a variety of different ways when it comes to your retirement and how to prepare for it. You might take heart in some of the more positive aspects of how things are changing, or you might be gloomy over the parts that are not. Either way, at least now you have an idea about what kind of changes you might see coming in this new year.
Check out some more advice from David Giertz on what to expect in 2018 on his OnMogul page: https://onmogul.com/david-giertz-70