Personal Retirement Accounts- Save For Your Future!
For most individuals, retirement planning is done with the ownership of qualified accounts – 401K plans, Regular IRA’s, Rollover IRA’s, or 403-B Plans. These plans offer the ability to invest capital in a tax deferred or tax free account, so over a long period of time, capital can build up without having to pay taxes each year by waiting until it is required for those liabilities to be paid. The affect on how much you will save over a long period of time is dramatic and makes a huge difference in how much money you will have for retirement. Individual account owners are advised to compare performance in these accounts to a comparable benchmark, usually an index like the S&P 500, Dow Jones, Industrial Average, NASDAQ, or MSCI Index.
2020 Contribution Limits
In an IRA, either Individual, Roth, or Rollover, the maximum contribution limit is $6,000 per year if you are under the age of 50, or $7,000 if you are over 50. The 401K contribution limits for participants was raised so the maximum limit is now $19,500.00 per year. If you are employee age 50 or over, you can contribute an additional $6,500.00 per year, called a catch up contribution. Notice the vast difference between the contribution limits in a 401K plan versus an IRA. The difference of $13,500 per year, or over $20,000 per year for employees over 50, is dramatic and can make a huge difference in how quickly you accumulate assets for your retirement.