IRS Announces 2015 Pension Plan Limitations; Taxpayers May Contribute up to $18,000 to their 401(k) plans in 2015
The Internal Revenue Service has announced cost‑of‑living adjustments affecting dollar limitations for pension plans and other retirement-related items for tax year 2015. Many of the pension plan limitations will change for 2015 because the increase in the cost-of-living index met the statutory thresholds that trigger their adjustment. However, other limitations will remain unchanged because the increase in the index did not meet the statutory thresholds that trigger their adjustment. Highlights include the following:
The elective deferral (contribution) limit for employees who participate in 401(k), 403(b), most 457 plans, and the federal government’s Thrift Savings Plan is increased from $17,500 to $18,000.
The catch-up contribution limit for employees aged 50 and over who participate in 401(k), 403(b), most 457 plans, and the federal government’s Thrift Savings Plan is increased from $5,500 to $6,000.
The limit on annual contributions to an Individual Retirement Arrangement (IRA) remains unchanged at $5,500. The additional catch-up contribution limit for individuals aged 50 and over is not subject to an annual cost-of-living adjustment and remains $1,000. ...
I'm going to be holding TAG 401(k) Enrollment Meetings at various studios over the next month. If you're a TAG member interested in enrolling, you should give us a holler or simply go to the Animation Guild website and download the forms.
And if you're NOT a guild member working at a signator studio, this is still important. Because if you're a wage earner, there's a good chance that your employer offers a 401(k) Plan. And it's important that you participate in it.
Because, guess what? The government will likely not be funding your retirement, nor will very many American corporations I can think of. So if you want to enjoy an existence in your autumnal years that isn't living in a one-room flat with six other people and eating Alpo, then you'd be well advised to tuck something away ... even if it's only 2%-5% of your gross wages ... that can grow over time.
If you're in your twenties, stick it all in a stock index fund. If you're in your thirties, forties, or fifties, put it in a balanced stock/bond fund. But do something.
You can now return to your normal weekend pursuits.
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And if you're NOT a guild member working at a signator studio, this is still important. Because if you're a wage earner, there's a good chance that your employer offers a 401(k) Plan.
It depends on the shop. I worked at over ten different VFX shops from 1999-2013, and I only had access to a 401(k) Plan once.
To those working without 401(k) plans: you are still allowed to save for retirement. You're just going to have to do it with IRAs (Roth and/or Traditional), I-Bonds and taxable investing. I'm doing all three now, but I wish I had started doing the last two earlier.
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