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David Giertz
David Giertz Business Strategist and Advisor
1mo Dublin, OH, United States Story
Some Retirement Contribution Changes Are Going to Be Coming in 2018

In 2018, the government has adjusted a few retirement contributions and deduction which will significantly effect retirement savings. You can take advantage of these changes as to increase your nest egg. Please look at your financial picture to see which option is best.

IRA Deductions Ceiling
If you work for an employer that has a retirement plan then you are limited to deductions for IRA contributions. The deduction is reduced up to a certain point, and the deduction is eliminated over a certain point. A single taxpayer between 63000-73000 income bracket will lose out on the deductions as well as head of household. Taxpayers that are married will lose deduction at 101,000-121,000 income bracket when filing together. this scenario is based on the spouse paying the contribution has the employer-sponsored plan. The income bracket is 189,000-199,000 to lose deduction if the taxpayer making the contribution doesn't have the employer-sponsored plan. Taxpayers that are married but they choose to file taxes separately the income bracket is 0-10,000.

Roth IRA Changes
IRA rules dictate that if your income is above a certain level, then individuals aren't able to contribute to IRA accounts. In 2018, individuals with an income of 120,000-135,000 will have their deduction reduced over their income range. This applies to single and head of household tax filers. A married couple with a joint income of 189,000-199,000 will see their deduction reduced over their income range.

401K Contributions
Individuals with the 401K account will be able to contribute more money tax-free to their accounts; the contribution limit has been increased to 18,5000 for 401K. Individuals who are 50 years old and older, they will be allowed to contribute 24,500 tax-free to their 401K accounts for 2018. This provision will help older American fund their accounts which is termed catch-up.

Health Saver Contribution Changes
The health saver account is a fantastic financial tool which can be tax-free if utilized appropriately. this account allows individuals to make tax-free contributions, and they can utilize funds to pay for approved medical expenses. The fund's roll-over in the account and the account can be taken with the individual if they leave their current employer. the contribution limits have been increased to 3450 for single, and 6900 for married taxpayers. After the taxpayer is 65 years old then the funds can be used for anything without a tax penalty. The taxpayer will have to pay taxes on the withdrawal.

Savers Credit Increases
The tax savers credit allows tap payer to receive a credit for making contributions to a retirement account. The taxpayer must be below the income threshold for their situation. The single & married filing separately taxpayer can't make more than 31,500 in income. The married filing jointly taxpayer income can't exceed 63,000 per year which also includes a head of household taxpayer.

In conclusion, the retirement changes for 2018 are geared to encourage more retirement savings which can offset social security payments. The changes are significant to all income brackets which is seen as positive. The changes also affect those nearing retirement with more ability to save for their future.

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David Giertz
Business Strategist and Advisor

Born in Dublin, OH in 1963, David Giertz went to Millikin University in Decatur, IL earning a Bachelor of Science degree. Subsequently, Giertz attended the University of Miami, Coral Gables, and received an Executive MBA.

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