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    Take Advantage of Greater Retirement Account Contributions in 2019

    If saving more for retirement is one of your new year's resolutions (and it probably should be, for all of us), you're in luck: the U.S. government is allowing for greater maximum savings rates in 2019. Here are the details of your new limits.

    401(k) plans

    • The maximum you can contribute to your company 401(k) has gone up by $500, to $19,000 for 2019.

    • Since catch-up contributions are unchanged, individuals 50 and older (including those who turn 50 during the year) can continue to contribute an extra $6,000 this year.

    • If your company offers a Roth 401(k) or other after-tax savings vehicle, your total contribution limit (including pre- and post-tax savings) is $56,000 for 2019.

    Individual retirement accounts (IRAs)

    • The maximum you can contribute to an IRA has gone up by $500, to $6,000 for 2019.

    • That $6,000 limit is all inclusive of traditional IRA and Roth IRA contributions, so you could decide to contribute $3,000 to a traditional IRA and $3,000 to a Roth, but you cannot save more than $6,000 total this year.

    • Since catch-up contributions are unchanged, individuals 50 and older (including those who turn 50 during the year) can continue to contribute an extra $1,000 this year.

    • If you meant to save more in an IRA for 2018 but didn't get around to it, you still have time. Funds you save before April 15 can count toward your 2018 contribution limit if you choose.

    Business owner retirement accounts

    • If you own a business, the maximum you can contribute to a solo 401(k) or simplified employee pension (SEP) IRA has gone up by $1,000, to $56,000 for 2019.

    • The maximum you can contribute to a savings incentive match plan for employees (SIMPLE IRA) has gone up by $500, to $13,000 for 2019.

    • Since catch-up contributions are unchanged, individuals 50 and older (including those who turn 50 during the year) can continue to contribute an extra $3,000 this year.

    While most people find it difficult to save enough to reach these maximums in a single year, these numbers provide good goals to strive for, and the government tries to encourage us by increasing our tax breaks to keep up with inflation. The most important thing is that you're saving as much as you can now to fund the worry-free retirement you deserve. And, following our federal government's lead, remember that as inflation makes prices of goods and services increase, you must increase your savings to overcome that gradual loss of purchasing power.

    For customized retirement planning advice, consult one of our wealth advisors.

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