Wednesday, October 8, 2014

Four year-end retirement plan reminders

Retirement plans are one of the best ways to cut your current tax bill while you put money away for your retirement years. Here are four year-end reminders.

1. Time is running out for 2014 contributions to 401(k) plans. This year you can put up to $17,500 in your 401(k); if you'll be 50 or older by December 31, that limit increases to $23,000.

2. If you have a SIMPLE retirement plan, the 2014 contribution limits are $12,000 if you're under 50 and $14,500 if you're 50 or older.

3. IRA contribution limits for this year are $5,500 for those under 50 and $6,500 for those 50 and older.

4. If you're over 70½ years old, you generally have to take a minimum distribution from your IRA by December 31. If you just turned 70½ this year, you can either take your first required minimum distribution by December 31, or you can wait as long as April 1, 2015, to take the first distribution. Keep in mind that if you wait, you'll have to take two distributions in 2015. Unless you're still working, these rules also apply to other retirement plans (such as 401(k)s). Note, however, that no distribution requirements apply to Roth IRAs.

For further details or for any assistance with your year-end tax planning, give us a call.

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