The IRS announced the 2015 cost of living adjustments for retirement plans which are detailed below:
The following increases will be effective January 1st, 2015.
|Salary Deferrals for 401K/403b/TSP/457 Plans|| |
|Catch-up Contribution for 401k/403b/TSP/457 Plans- age 50 and older|| |
|Simple Plan |
|Simple Plan Catch-up |
Age 50 and older
|Annual Contribution |
limits to Defined
|IRA and Roth IRA contribution limits|| |
|IRA/Roth IRA Catch-up |
for age 50 and older
|IRA Phase out for investors with workplace plans|| |
|Roth IRA Phase out for contributions|| |
The Social Security Administration has announced the cost of living adjustments for benefits as well as the wage base subject to the annual taxes for 2015. Â The increase, which is based on the current Consumer Price Index (CPI), is 1.7%. This increase would reflect the sixth consecutive year of record low cost of living adjustments and would raise the average benefit by $20. The wage amount subject to payroll taxes will increase roughly $117,000, a $2,000 increase.
The monthly premium for Medicare Part B (outpatient services) will stay at $104.90 in 2015 for the third consecutive year.
Stock Market volatility has returned along with fears of a meltdown.Â If you look at the chart below, the VIX, which is a measure of volatility, is breaking to the upside while the S&P 500 index appears to breaking down.
There are now new rules for taking after tax money from qualified retirement plans (such as a 401K, 403b, or 457b accounts.) If you have any after tax contributions within your plan, they can now be rolled directly into a Roth IRA upon separation from service. In the past, most people either rolled all of their funds into an IRA and paid taxes pro-rata, based on the ratio of pretax to post tax contributions, or they had the option to take a separate check for the after tax funds and roll the balance of the funds into an IRA. Now the IRS has ruled that the after tax funds can be transferred into a Roth IRA where they can grow tax free (think of this like a tax free Roth conversion).
Clients will often review their quarterly investment statements and ask the following questions:
â€śI noticed that this particular fund or asset class was down.Â Why should I be invested in it if it just keeps going down?â€ť
â€śLarge cap stocks have done so well recently, why donâ€™t I just invest all of my money allocated to equities in large cap funds?â€ť
The recent love affair with US large caps is understandable.Â This asset class had spectacular performance in 2013, as well as the past 5 years.Â However, 10 and 15 year performance lagged other asset classes.Â See the chart below.
When it Comes to Finances, as Rodney Dangerfield Would Say, Women Still â€śDonâ€™t Get No Respectâ€ť.
For years I have been the â€śCFOâ€ť of my household.Â Â Over twenty plus years of marriage, I have paid the bills, done all of the investing, monitored the family budgetÂ and net worth, negotiated mortgages,Â and even have power of attorney for my husband, so that I can execute trades on behalf of him.Â We both have charities that are near and dear to our hearts, but we normally write a check for all of our donations from our joint account.Â Â Often, the thank you card we receive from the charity is addressed only to my husband.Â Â Ouch!