Lost amid the uproar following recent news reports that GOP lawmakers are considering capping pretax 401(k) contributions at $2,400 annually — compared with $18,000 currently — was some good news from the IRS, of all places. The tax agency has announced new, higher contribution limits in 2018 for various retirement savings accounts.

Individuals who participate in a 401(k) or other similar type of retirement plan need to know these new limits as they begin to think about their cash flow and financial planning for 2018. The annual limit on contributions for 2018 is $18,500, up from the current limit of $18,000. And if you’re 50 or older at any time during the year (even if your 50th birthday falls on Dec. 31), you can also make additional catch-up contributions into these tax-advantaged savings plans and accounts of an additional $6,000, for a total annual contribution of $24,500. The self-employed can also set up and fund their own 401(k) profit-sharing plan, which allows for the same type of contributions mentioned above. Using this type of plan, which is easily set up at any major brokerage firm, you can also make an additional contribution that’s a percentage of net profit (this is the profit-sharing part of the plan).

You can read more about the 2018 changes at the below link.

CBS News

About Jerry

Jerold E. Rothkoff, a practicing New Jersey and Pennsylvania attorney, is the Principal of the Rothkoff Law Group, an elder care law firm. Jerry dedicates his practice to serving clients in the areas of life care planning, long-term care planning, Medicaid & VA benefits, and advocacy for the elderly and disabled. He is past President of the NJ Chapter of the National Academy of Elder Law Attorneys, former chair of the elder law section of the NJ State Bar Association, and past President of the Life Care Planning Law Firm Association. Jerry continues to be an outspoken advocate for the rights of the elderly and disabled. He writes for and gives presentations regularly to attorneys and other professionals about legal issues related to seniors and those with disabilities. Jerry’s community activities include the Twilight Wish Foundation, the Delaware Valley Stroke Council, the Alzheimer’s Association, as well as numerous other advocacy groups. When not in the office, Jerry spends time with his wife, Erica, and their five children, eighteen-year old identical twin girls, Liza and Julia, fifteen-year old fraternal twin boys, Evan and Gregory, and six-year old Aitan.

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