Make adjustments to your contributions and boost your retirement savings

With the ringing in of the New Year comes new contribution limits for retirement plans and health savings accounts. Now is the time to adjust the amount of your salary deferrals and contributions to take advantage of the increased limits.

Defined Contribution Plans (401ks, 403bs, 457 plans)

The maximum salary deferral increased from $17,500 to $18,000 and for individuals age 50 and older, an additional catch-up of $6,000 is allowed, for a total of $24,000.

The annual additions limit (salary deferrals and employer contributions) for defined contribution plans increased from $52,000 to $53,000 and for individuals age 50 and older, the limit increased from $58,000 to $59,000.

SIMPLE IRA and SIMPLE 401(k)

The maximum salary deferral increased from $12,000 to $12,500 and for individuals age 50 and older, the additional catch-up is $3,000, for a total of $15,500

Health Savings Account (HSA)

For those enrolled in a high-deductible health plan, the maximum deductible contribution to an HSA increased from $3,300 to $3,350 for individuals and from $6,350 to $6,450 for families. For individuals age 55 and older, an additional catch-up of $1,000 is allowed.

IRA and Roth IRA

Contribution limits for traditional IRAs and Roth IRAs remained unchanged at $5,500 per year. For individuals age 50 and older an additional catch-up of $1,000 is allowed, for a total of $6,500.

Keep in mind, if you are covered by an employer-provided plan or have income above a certain threshold, you may not qualify to make an IRA or Roth IRA contribution.  If you do qualify, the deadline to make your 2014 contribution is April 15, 2015.

For questions or more information, please contact Harris Financial Advisors, Inc.