How to Maximize the Value of Your Retirement Savings Before Year-End

10:56 pm Retirement Planning

golden eggs 150x150 How to Maximize the Value of Your Retirement Savings Before Year EndAssuming you would like to maximize the value of your retirement savings accounts – IRAs and 401(k)s – there are certain tasks you need to take care of before the end of 2013 and some that can wait until it’s time to file 2013 taxes in April:

401(k)

December 31:  Max out your 401(k) contribution for the year — $17,500 for those under the age of 50 and $23,000 for those over 50.  If you are over the age of 70 ½, you must also take your required minimum distribution (RMD) by Dec. 31.  By year’s end, you should receive an annual statement outlining the fees you paid and comparing them to a benchmark – review that statement to ascertain whether or not you should alter your investment lineup.

IRAs

December 31:  Those over the age of 70 ½ are required to take their required minimum distribution (RMD) by Dec. 31 – the penalty for failing to do so can be up to 50 percent of what should have been withdrawn.

April 15:  You can make 2013 IRA contributions up until April 15, 2014, but be sure to instruct your financial institution to record your contributions as 2013, not 2014, contributions.  The maximum contribution limit is $5,500 for those under the age of 50 and $6,500 for those 50+.

Contribution limits for IRAs and 401(k)s will remain the same in 2014 for workers under the age of 50.  Catch-up contributions for those over the age of 50 will also stay the same, at $5,500 for 401(k)s and $1,000 for IRAs.

For more retirement planning insights, contact our Newport Beach law firm.

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