The new year will bring with it some modest but noticeable changes to both your 401(k) retirement plans and IRAs. Workers with slightly higher incomes will qualify for retirement-savings tax deductions and credits. Lets take a quick look at some other changes taking place in 2014.
According to USA Money News, the amount workers can contribute to 401(k)s and individual retirement accounts will stay the same in 2014. Inflation, as measured by the Consumer Price Index, did not increase enough to justify raising the contribution caps. "Some pension limitations such as those governing 401(k) plans and IRAs will remain unchanged because the increase in the Consumer Price Index did not meet the statutory thresholds for their adjustment," according to a statement from the Internal Revenue Service. But some of the income thresholds that allow savers to qualify for tax deductions and credits will increase next year.
Here's a look at how 401(k) and IRA rules will change in 2014:
- Limits for 401(k) contributions unchanged
- IRA contribution limits unaffected
- Larger IRA income limits
- Higher Roth IRA income cutoffs
- Bigger saver's credit threshold
For more information on each category and how it may or may not affect you, please see the entire list detailed out here.
Retirement is an exciting thing, and most of us who are serious about how our retirement is going will want to look into all of the small changes that will be coming to 401(k)s and IRAs in 2014. Though these changes may be small, they can greatly affect your money flow in the long run.