Banks for You!

It is getting to be that time of year again where you want to make sure that hit all of your retirement contributions prior to the end of the year. Here are details for 2010:

401k and 403b Contribution Limits Contribution Year Less Than Age 50 Age 50 and Older 2008 $15,500 $20,500 2009 $16,500 $22,000 2010 $16,500 $22,000 Roth IRA Contribution Limits Contribution Year Less Than Age 50 Age 50 and Older 2008 $5,000 $6,000 2009 $5,000 $6,000 2010 $5,000 $6,000   Roth IRA Phase Out Limits Contribution Year Single Married Filing Jointly 2008 $101,000 – $116,000 $159,000 – $169,000 2009 $101,000 – $116,000 $159,000 – $169,000 2010 $105,000 – $120,000 $167,000 – $177,000  

I will add the 2011 numbers as I get them. Also note that in 2010 the income limits to contribute to a ROTH IRA are removed when doing a conversion to a ROTH IRA.

It is obvious that the government hasn’t done much to increase those limits. I am still hearing rumors that they are wanting to get rid of the ROTH IRA loophole, so my advice to you is to max that out if possible, since it is a great tax savings vehicle. Don’t forget that you can contribute to a 2010 ROTH IRA in 2011 prior to April 15th. So even if you haven’t started setting aside your 2010 contributions, you still have about 6 months to get that $5000 in there.

For those of you new to planning for retirement, here is what I recommend:

• Pay into your 401k the required amount to receive your full company match (if your company doesn’t have a 401k match, skip this)
• If you have credit card debt, pay it off!!! (if no credit card debt, skip this)
• Max out a ROTH IRA. Put $5000 after tax dollars into a 2010 ROTH IRA
• Max out your 401k. The current max is $16,500 for 2010
• Save Save Save – Start saving the rest of your extra cash. It is always recommended to have a buffer of 4-6 months of your living expenses saved up in case of unforeseen circumstances, such as job loss, illness, etc.

If you follow those simple steps, you should be on your way to a healthy retirement. Now only if we could get the market and economy to cooperate!!

Similar Posts:

• Self-employed? You’ve got more retirement savings options
• How to deploy an extra $500 a month
• What Are The Advantages And Disadvantages Of A Roth IRA?
• Make your retirement period enjoyable with Roth IRA
• Don’t count on an inheritance to fund your retirement