You’ll be allowed to contribute an extra $ 500 to your 401(k) next year.
The government will raise the contribution limit to $ 18,500 from $ 18,000 in 2018. It reassesses the limit annually.
If your employer doesn’t offer a 401(k), you can contribute to an IRA or Roth IRA to save for retirement. They have tax advantages and contribution limits, too. There’s also a restriction on who can use a Roth IRA based on income.
The limit on how much you can contribute to your IRA or Roth IRA will remain unchanged at $ 5,500 next year. But the income eligibility for a Roth IRA will rise.
Here’s what you need to know for 2018.
How much can I contribute to my 401(k)?
You can defer up to $ 18,500 from your paycheck. Those age 50 and older can save even more by making what’s called a “catch-up” contribution. That’s limited to $ 6,000 a year, for a total of $ 24,500.
These limits don’t include the matching contribution you may receive from your employer. They also apply to 403(b) plans and the federal government’s Thrift Savings Plan.
How much can I contribute to my IRA or Roth IRA?
You can contribute as much as $ 5,500. If you’re 50 or older, you can save an additional $ 1,000, for a total of $ 6,500.
Can I contribute to a Roth IRA?
You might earn too much money to be eligible to contribute to a Roth IRA, which only allows after-tax contributions, but tax-free withdrawals. In general, you can contribute money to a Roth IRA next year if you earn less than $ 135,000 and are single, less than $ 199,000 if married and filing jointly, or less than $ 10,000 if married and filing separately.