Retirement

2018 HSA Limits

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***5.11.2018 Update: The Tax Cuts and Jobs Act changed the inflation adjustment calculations for 2018 HSA contributions by $50, down to $6,850 (family). But on April 26, 2018, the IRS released Revenue Procedure 2018-17, providing relief to taxpayers by allowing $6,900 (family) as the maximum deducible HSA contribution.

Contribution Limit - $3,450 (individual) and $6,900 (family)

Minimum/Maximum Deductibles for HDHP - $1,350/$6,650 (individual) $2,700/$13,400 (family)


What is an HSA? A Health Savings Account (HSA) is a tax-exempt type of savings account that allows you to pay for or reimburse qualifying medical expenses you incur. Local banks and other online trustees offer HSA type accounts.

May anyone set up an HSA? No. You must have a high deductible health plan (HDHP) in order to be eligible to establish an HSA.

What are the benefits of an HSA? Contributions are tax deductible (or excluded from gross income if made by an employer). Interest and earnings on the account are tax free. Monies in the account roll over year to year. You own the account; your employer does not. Distributions are tax free if used for qualifying medical expenses. Your HSA can also be another advantageous component of your retirement portfolio.

2018 Retirement Plan Limitations

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**2.7.2018 Update: The IRS recently announced that the Tax Cuts and Jobs Act of 2017 did not change 2018 retirement plan limitations. The announcement is available here. Below is my previous blog post on these amounts.

401(k) and 403(b) Contributions (elective deferrals): Employee contribution limit increased to $18,500 (up from $18,000), plus $6,000 catch-up contribution if aged 50 and over. (There is no change to the catch-up amount.)

401(k) and 403(b) Contributions (employee + employer): Increased to $55,000 (up from $54,000)

401(k) and 403(b) Annual Compensation Limit: Increased to $275,000 (up from $270,000)

Traditional IRA and Roth IRA Contributions: No change; remains at $5,500, plus a $1,000 catch-up contribution if aged 50 and over.

SIMPLE IRA Contributions: No change; remains $12,500.

Traditional IRA (if also covered by an employer retirement plan) Income Phase-outranges:

  • Single taxpayers at $63,000 to $73,000 (up from $62,000 to $72,000)
  • Married taxpayers filing jointly at $101,000 to $121,000 (up from $99,000 to $119,000) and applies if the contributor is also the one covered under employer retirement plan
  • Married taxpayers filing jointly at $189,000 to $199,000 (up from $186,000 to $196,000) and applies if the contributor is not covered under an employer retirement plan, but the spouse is covered under a plan
  • Married taxpayers filing separately at $0 to $10,000 (no change)

Roth IRA Income Phase-out Ranges:

  • Single taxpayers at $120,000 to $135,000 (up from $118,000 to $133,000)
  • Married taxpayers filing jointly at $189,000 to $199,000 (up from $186,000 to $196,000)
  • Married taxpayers filing separately at $0 to $10,000 (no change)

Saver’s Credit (Retirement Savings Contributions Credit) Income Limits:

  • Single taxpayers at $31,500 (up from $31,000)
  • Married taxpayers filing jointly at $63,000 (up from $62,000)
  • Heads of household taxpayer at $47,250 (up from $46,500)
  • Married taxpayers filing separately at $31,500 (up from $31,000)

More details available with IR-2017-177, dated October 19, 2017,  or IRS Notice 2017-64 on the IRS website.