First of all, the contribution limit for 401(k)s will increase by $500 to $18,000. For those 50 and older the catch-up contribution also will increase by $500 to $6,000. The IRA contribution limit, however, did not change and will remain at $5,500 with those over 50 allowed to contribute an additional $1,000 for a total of $6,500. You will want to consult with your tax advisor to see whether contributions will be tax deductible if you are currently working and have access to a retirement account. Remember, you have until April 15th of 2015 to make 2014 IRA and Roth IRA contributions. If you would still like to make a 2014 contribution we encourage you to do this no later than April 1st to ensure all trades and settlements are done in a timely fashion if we need to raise some cash.
If you are currently a recipient of Social Security you will receive a 1.7% cost-of-living adjustment. Further good news is that Medicare Part B will not have an increase in premiums and will remain at $104.90 a month for 2015. However, Medicare Part A will increase from $1,216 to $1,260 in 2015 and most Medicare Part D premiums will likely increase by 4% to an average $38.83.
We hope this helps you in planning your finances for 2015 and as always please contact us if you have any questions regarding your wealth.