From changes in contribution limitations to a new account option, here’s what retirement savers can expect for 2015
IRAs. The IRA contribution limit will remain $5,500 for 2015 with a $1,000 catch-up provision for those above the age of 50. Also, individuals will be allowed to receive a distribution from an IRA and roll the funds over to another IRA (or the same IRA) within 60 days to avoid any taxation issues only once per calendar year. An additional rollover may result in income taxes, a tax penalty, and an excess contribution tax.
Roth IRAs. There will be a $2,000 increase on the income limits for Roth IRA contributions. For individuals, the limits are now between $116,000 and $131,000. For married couples, the limit range is between $183,000 and $193,000. Additionally, individuals who are above these cutoffs may still be able to take advantage of a Roth conversion.
401(k) Plans. At the start of 2015, participants in 401(k) and 403(b) plans will have contribution limits. A participant will be eligible to contribute up to $18,000, a $500 increase over 2014. Additionally, the catch-up contribution limit for those 50 and older also increases by $500 to $6,000 for 2015.
New retirement account. The Treasury is expected to offer a new type of retirement account, the myRA. These Roth accounts with be funded with after-tax dollars via payroll deduction, but they are not tied to your job and are guaranteed by the government to never lose value. The myRA will be available to workers with an annual income of less than $129,000 for individuals and $191,000 for couples, and they can use the account for up to 30 years or until their account balance hits $15,000, after which the balance will transfer to a private-sector retirement account.
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