Majestic Oak Financial

Happy New Year! With the new year comes an increase in 401k/403b plan contributions. For 2020, you can contribute up to $19,500 plus another $6,500 if you are age 50 or better. If you get paid once per month, that means increasing your contribution to $1,625. If you get paid on the 1st and 15th, your contribution can be $812.50/paycheck. If you get paid every other Friday, the new amount is $750. If you can hit these amounts, that's great but even if you can't, every bit counts toward providing yourself with more security in your later years. So get online and up your contribution at least a little bit!

It still has to go through the Senate but big changes in retirement accounts might be coming our way. For example, delaying the age for required distributions from IRAs to age 72 (good in that it gives us more flexibility) but potentially eliminating the stretch IRA provision in inherited IRA accounts (bad for our tax bills).

House Passes Secure Act Retirement Bill | ThinkAdvisor A provision affecting 529 plan accounts was stripped from the bill before the vote.

There are many rules of thumb out there about how much you will spend once you retire. A retiree won't truly know what his/her retirement lifestyle will cost until s/he settles down into retirement, but why not learn from those who are already there?

Reality check: Here’s what the average retiree spends every month Retirement is portrayed as carefree days of golfing, fishing and Mai Tais on the beach. Is that based on financial reality?

It's a new year and the IRS has raised the contribution amount for retirement accounts!

If you have a 401k or 403b plan at work, you can now contribute $19,000/year with another $6,000 if you're 50 or better.
IRAs and Roth IRA limits are now $6,000 with a $1,000 catch-up if you're 50 or better.

If you make the change at the beginning of the year, you won't miss the few dollars but it makes a big difference in the long run!

Due to several years of our low inflation environment, the IRS has kept the contribution limits on tax-advantaged accounts like 401(k)s, Roth IRAs and Traditional IRAs flat.

Starting next year, the limits increase so you can put away more money for your future! 401(k)s increase to $19k (plus another $6k if you're 50 or better) while Roths and Traditional IRAs increase to $6k (plus another $1k if you're 50 or better). Every little bit helps build a more secure and adventurous future!

My new and improved website is live! Come check it out at www.majesticoakfinancial.com

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