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You Can Contribute More to Your 401(k) in 2018

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[Question]How much will I be able to contribute to my 401(k) and IRA in 2018? Also, are the income limits to be eligible to contribute to a Roth IRA increasing?

SEE ALSO: The Power of Boosting 401(k) Contributions

[Answer]You'll be able to contribute a little more to your 401(k) in 2018, but the maximum IRA contribution will stay the same as in 2017. The annual contribution limit for 401(k), 403(b) and 457 plans, as well as the federal government's Thrift Savings Plan, is increasing from $18,000 to $18,500. The catch-up contribution for people age 50 and older will remain at $6,000, bringing their total contribution limit to $24,500 in 2018.

The IRA contribution limit will remain at $5,500 in 2018, and the catch-up contribution for people who are 50 or older will stay at $1,000. If you turn 50 in 2018, you can make the full $6,500 contribution anytime after January 1; you don't need to wait until your birthday.

The income limits to qualify to make Roth IRA contributions will increase slightly. People who file taxes as single or head of household will be able to contribute the full $5,500 (or $6,500 if they're 50 or older) to a Roth IRA in 2018 if their modified adjusted gross income is less than $120,000, and the contribution amount will phase out completely if they earn more than $135,000 (up from $118,000 to $133,000 in 2017). Married couples filing jointly will be able to contribute the full amount if their modified adjusted gross income is less than $189,000, with the amount phasing out above $199,000 (up from $186,000 to $196,000 in 2017).

SEE ALSO: Are You Saving Enough for Your Retirement?

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Copyright 2017 The Kiplinger Washington Editors

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