Now is the time of year when you’re taking a hard look at your financial picture and developing a plan for the year.
Before you start, check the all-important Internal Revenue Service (IRS) contribution limits for 2021. For details, visit the IRS site at https://bit.ly/3mUplK4 and https://bit.ly/2JpWZK5.
For individuals contributing to a 401(k), 403(b), most 457 plans, and the federal government's Thrift Savings Plan, the contribution limits stay at $19,500.
For those over the age of 50, the catch-up contribution stays at $6,500.
The maximum contribution limits for individual retirement accounts (IRAs) will be $6,000 — the same as 2020 — and those over 50 may stash away an extra $1,000 in their traditional IRAs and Roth IRAs.
The income phase-out range for taxpayers making contributions to a Roth IRA increased. It will be $125,000 to $140,000 for singles and heads of household, and for married couples filing jointly, the income phase-out range is $198,000 to $208,000.
Before making any significant money moves, it’s smart to talk to your accountant and financial advisor to determine the investment strategy that will best fit your goals.
