Time to update your savings plan for 2015 – new 401k, HSA, and other contribution limits increased!

2015 Contribution Limits; 2015 401k contribution limits increased
KJ: With updated savings limits for 2015 being finalized by the IRS recently, it’s time to plan for this next year for any changes to your savings plan. Some limits were increased (401(k), SEP, SIMPLE), but others remain the same (IRA). Either way, it can mean more strategic cash flow planning for your family, so you can eek out a little more savings for your future selves.

401k Employee Contributions
The IRS updated their 2015 401k contribution limits for what you can save to your 401(k). Regular & Roth 401(k) contribution limits for 2014 were $17,500, and this number increases $500 to $18,000 per year for 2015. And, if you’re over the age of 50, then you can contribute an additional $6,000 for a whopping $24,000 per year.

Whether you contribute to the 401(k) pre-tax or via Roth, the 2015 401k contribution limit is the same! That works out to a savings of $1,500 per month. Whether you’re early to the saving game or late to the game, contributing SOME amount is critical. Then, as you get better and better with your savings, work to try and maximize this over time.

IRA Contributions
IRA contribution limits are unchanged for 2015 from the 2014 levels. So, each person can contribute up to $5,500 for 2015. If you’re over the age of 50, then you can sock away an extra $1,000 per year for a total of $6,500.

HSA Contributions
HSA contribution limits have increased slightly for 2015. For single individuals on a high deductible health plan (HDHP), you can contribute $3,350 per year. For family plans, you can contribute just shy of double that figure at $6,650. And, if you’re age 55 or older (not to be confused that this is a different age than the IRA and 401k “catch-up” contribution limits), you can save an additional $1,000.

SEP IRA Contributions
These accounts are typically just for those who are self-employed, and the contribution maximums are quite substantial. For 2014, you can contribute $52,000. For 2015, this figure is increased to $53,000.

SIMPLE IRA Contributions
Some people have access to a SIMPLE IRA through work – not uncommon for smaller employers, and these contribution amounts have increased for 2015, too. The old figures for 2014 were $12,000 with a $2,500 age-50 catch-up. This figure is increased $500 per year to $12,500 with an extra $3,000 contribution for those who are over age 50.

Read more about SEP IRAs and SIMPLE IRAs on the IRS site about Individual Retirement Arrangements (IRAs).

Regular savings
With your regular savings account(s), you can sock away any amount per year or month that you want until your heart is content!

Investment savings
If you have a long-term investment brokerage account with some good old stocks, bonds, mutual funds, etc. then you have NO limits on what you can contribute each year for these accounts either. The sky’s the limit!

Setting your plan for 2015
With LOTS of ways to save in tax-advantaged ways, there typically isn’t a shortage of ways you can save. If you have a 401(K) at work, an HSA, and an IRA, then $26,850 is what you can contribute between the three accounts – that’s about a hefty $2,200 per month! For a spouse or significant other in the same situation, double that figure for a total of $53,700 for your household! Woah!

And, just because you don’t have a 401(K) through work, doesn’t mean you should throw in the towel and stop saving. In fact, it means it’s all the more important for you to contribute to your regular savings and investments to build your net worth that way over time.

    What are your savings goals for 2015?
    Are you doing anything to maximize your 2015 401k contribution limit?
    Will you be changing your contributions for any of these accounts?

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