Retirement Preparation 101 video

Check out this 17 minute video, courtesy of the Squared Away Blog:

https://squaredawayblog.bc.edu/squared-away/video-retirement-prep-101/

Kevin Bracker, a finance professor at Pittsburg State University in Kansas, presents a solid retirement strategy to workers who need to get smart about saving and investing.
Bracker explains the most important concepts clearly – why starting to save early is important, why index funds are often better than actively managed investments, the difference between Roth and traditional IRAs, etc.

Retirement plan limits for 2019-2020

 401(k) contributions
The annual contribution limit for employees who participate in 401(k), 403(b), most 457 plans and the Thrift Savings Plan used by federal government employees increased in 2019 to $19,000 (and those limits will be going up another $500 in 2020). If you’re 50 or older, you also can take advantage of a catch-up provision of $6,000 (a figure that is also rising by $500 in 2020). That means all together you could put away $25,000 in your employer-sponsored plan in 2019 — and that total rises to $26,000 in 2020. And in case you were wondering, your employer’s matching contribution, if there is one, doesn’t count toward your limit

IRAs
The contribution limits for traditional and Roth IRAs went up in 2019 — to $6,000, or $7,000 for those who are 50 and older. So if you’re a 50-plus individual focused on growing your savings account, you could put away as much as $32,000 between your 401(k) and your Roth in 2019.

Contribution limits for Roth IRAs and traditional IRAs will remain the same in 2020.

Thanks to:  Dina Siracusa, Investment Adviser Representative | Provident Wealth Advisors
Source: https://www.kiplinger.com/article/retirement/T047-C032-S014-401-k-and-ira-advice-especially-for-women.html

IRS raises caps on contributions to 401(k)s, IRAs

On November 1, 2018 the IRS announced cost-of-living adjustments to contribution limits for several types of retirement plans for 2019. The cap on contributions to 401(k), 403(b), many 457 plans and the Thrift Savings Plan rose to $19,000 from $18,500, while the limit for IRA contributions is $6,000, up from $5,500. This is the first increase since 2013. 

Other inflation adjustments were announced for retirement accounts. 

Start planning now to increase you retirement account contributions for next year. 

Reported by Richard Rubin for The Wall Street Journal, 11/2/18.

Big Roth 401(k) Tax Surprise

Thanks to Kim Blanton writing in the Squared Away Blog for explaining the complexities of taxes on withdrawals from Roth 401(k) plans.
"Financial experts and writers often tout the Roth 401(k)’s main selling point: when the money is withdrawn in retirement, it won’t be taxed.
Well, that’s not entirely true.
An employee’s own money saved in his Roth account over the years is, indeed, shielded from income taxes when he retires and starts pulling out the money. That’s because the worker had paid the taxes before he put the money into the Roth.
But employer contributions to Roths are different. Employer contributions and any resulting investment earnings are taxed as income in the year that the money is withdrawn."

Read the details at: http://squaredawayblog.bc.edu/squared-away/know-about-the-roth-401k-surprise/