You can save as much as you like for Retirement per Year. Some Retirement vehicles have limitations as to the amount you can contribute each year and others which really do not have a limit.
What you need to look at is first, after I cover all my expenses, what is left? Make a commitment to putting that or some of that aside into a retirement vehicle. I would recommend a ROTH IRA for starters. IF you have access to a 401(k) through your employer I would recommend contributing to that especially if the company matches your contribution. If they only match up to a certain percentage then see if you can contribute up to that amount.
Talk to your adviser to see which option or options might be best for you.
Business Development Officer, T.D. McNeil Insurance Services, Fresno, California
There are ways to save your entire income for retirement if you desire. There are tax qualified plans that defer the taxation on a retirement program and they have annual contribution limits. If you are choosing to save for retirement using 401(k) elective deferral, if you are eligible for a 403(b) or a 457 Deferred Compensation plan, you could reduce your taxable income by up to $18,000 in 2015. If you are over age 50 you can increase those limits by $6,000.
You can make contributions to a simple IRA and reduce your taxable income by $12,500 and add on an additional $6,000 if you are over age 50.
You can establish a defined benefit pension plan and reduce your income by $210,000 in 2015. If you use a defined contribution plan you can reduce your taxable income by up to $53,000. There are a variety of other limits depending upon whether you have “highly compensated” employees or “key employees.”
The other most important limitation is on the ability of a person to participate in a Roth IRA. The maximum income you can have for a single tax payer is $131,000 to participate in a Roth IRA. If you are married the maximum income limit is $193,000. Notice I didn’t say anything about reducing taxable income. The Roth IRA is funded with after-tax income; however, qualified withdrawals can be received income tax free.
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What you need to look at is first, after I cover all my expenses, what is left? Make a commitment to putting that or some of that aside into a retirement vehicle. I would recommend a ROTH IRA for starters. IF you have access to a 401(k) through your employer I would recommend contributing to that especially if the company matches your contribution. If they only match up to a certain percentage then see if you can contribute up to that amount.
Talk to your adviser to see which option or options might be best for you.
You can make contributions to a simple IRA and reduce your taxable income by $12,500 and add on an additional $6,000 if you are over age 50.
You can establish a defined benefit pension plan and reduce your income by $210,000 in 2015. If you use a defined contribution plan you can reduce your taxable income by up to $53,000. There are a variety of other limits depending upon whether you have “highly compensated” employees or “key employees.”
The other most important limitation is on the ability of a person to participate in a Roth IRA. The maximum income you can have for a single tax payer is $131,000 to participate in a Roth IRA. If you are married the maximum income limit is $193,000. Notice I didn’t say anything about reducing taxable income. The Roth IRA is funded with after-tax income; however, qualified withdrawals can be received income tax free.