Because I couldn’t find a good reference online showing common retirement account contribution limits, I assembled this small cheatsheet as it might prove useful as a reference for others.
Health Savings Account (HSA) Investment Limit
Those aged 55 or older are able to contribute an additional $1,000 for a total contribution of $4,450 and $7,900 for single and family respectively.
401(k) Investment Contribution Limit
In 2018 the elective deferral limit for elective 401(k) contributions has been increased to $18,500.
This is up $500 from the $18,000 limit in 2017. Elective deferrals refers to contributions you choose to have withheld from your paycheck. The overall contribution limit of $55,000 doesn’t typically come into play for most workers since their company matches aren’t nearly generous enough to reach that number.
Those aged 50 or older are allowed to contribute an additional $6,000 bringing the elective deferral limit to $24,500. The total contribution limit also increases by $6,000 for a total limit of $61,000.
In addition to allowing for tax-deferred growth, the 401(k) is a great way to lower your annual gross income (AGI) which has the benefit of reducing your tax bill.
IRA Investment Contribution Limit
The 2018 individual retirement limit is $5,500 limit. Those aged 50 or older are allowed to make an additional $1000 “catch-up” contribution for a total IRA contribution of $6500.
SEP-IRA Investment Contribution Limit
Self-employed and small business owners are allowed to contribute up to a maximum of $55,000 in 2018. Because of this it really pays to own your own business. The permitted contribution towards the $55,000 limit is calculated as a percentage of the business owner’s salary. In order to contribute the full $55,000, a salary of $270,000 is required.
SEP-IRA allows for a large reduction in AGI compared to the aforementioned retirement investment accounts.
A great FREE tool I personally use for tracking my portfolio is Personal Capital. If you use this link to sign up for the account, it doesn’t cost you anything and both you and I will receive $20. Every little bit helps.
Legal Disclaimer: The information provided and accompanying material is for informational purposes only. It should not be considered legal or financial advice. You should consult with an attorney, CPA or other professional to determine what may be best for your individual needs.
