401k Investment Guide

2015 401(k) and IRA Contribution Limits

The Internal Revenue Agency (IRS) has announced the 2015 401(k) and IRA Contribution Limits, which were published on October 23, 2014. Changes were made to the investment limitations due to the increase in the cost-of-living expenses, which warranted an increase in 401(k) and IRA investment limits. The following explains the adjustments that have been made to contribution limits for the 2015 tax year.

The 401(k) and catch-up contribution limits or 2015 will increase by a total annual investment of $500, which increases the amount taxpayers may contribute towards their 401(k) plans to up to $18,000 – an increase from $17,500 from 2013/2014. Those over the age of 50-years-old are able to contribute an additional $6,000, allowing for a combined total investment of $24,000 in 2015 – an increase from $23,000 in 2013/2014.

The IRA contribution and catch-up contribution limit will remain the same as they were in 2014.… Read More »

2014 401(k) and IRA Contribution Limits

The long-awaited 2014 401(k) and IRA Contribution Limits have been announced. The limits were announced on October 31, 2013. Most of the contribution limits, unfortunately, remained unchanged as the Consumer Price Index (CPI) did not increase enough to warrant an increase in 401(k) and IRA contribution limits.

The 401(k) and catch-up contribution limits will remain the same as they were in 2013. Individuals can contribute up to $17,500 towards their 401(k) in 2014. Those over the age of 50-years-old are able to contribute an additional $5,500.

The IRA contribution and catch-up contribution limit will remain the same as they were in 2013. Individuals can contribute up to $5,500 towards their IRA in 2014. Those over the age of 50-years-old are able to contribute an additional $1,000.

Another important note is that there have been some minor changes to the Roth IRA phase out. The Roth IRA phase out comes into play if your income is  $181,000-191,000 for those filing joint tax returns.… Read More »

When Will 2014 IRA and 401k Contribution Limits Be Announced?

Each year, the IRS makes an announcement regarding whether IRA and 401(k) contribution limits will be increased or will stay the same. Whether or not the limits increase depends on the inflation rate. The IRS calls these increases COLA Increases (cost of living adjustments).  If the IRS feels that an increase is warranted, IRA and 401(k) contribution limits will increase in increments of $500.

In 2013, the IRA contribution limit increased from $5,000 to $5,500. The IRA limit remained at $5,000 from 2008 until 2013. Given the fact that the IRA contribution limit was increased in 2013 and that inflation has remained relatively low, I don’t suspect the IRS to increase the IRA contribution limit in 2014.

On the other hand, 401k(k)s have seen more frequent increases in their contribution limits compared to IRAs. There have been four increases in the 401(k) contribution limit since 2007 compared to just two increases for IRAs.… Read More »

Disney Stock: Selling Covered Calls For Extra Income

I’m reading the book Multiple Steams of Income, and although I’ve dabbled in options before, it gave me the idea to get more active with options, especially in my IRA. With an IRA, you have more flexibility with your investment options compared to a 401k. You generally have a limited menu of mutual funds to choose from in a 401k, but you have more freedom to select your own investments in an IRA and can own individual stocks unlike most 401k’s.

An option is a contract for the right buy or sell a security at a given price in the future. There are two types of options: calls and puts. A call is a right to buy a stock at a certain price in the future. A put is the right to sell a stock at a certain price in the future. I’m going to focus on a covered call in today’s article.… Read More »

How much should I have saved for retirement by age 30?

So you’re turning 30-years-old and you’re starting to think about financial goals and retirement. A lot of 30-year-olds are currently in a tough spot with their finances since they’ve likely graduated with a hefty amount of student loan debt while entering one of the worst job markets in decades. Hopefully, you’ve been fortunate enough to find a job, begin a career, and begin contributing to your retirement.

What I wanted to discuss was how much you should have saved by now in your 401(k) or IRA by the time you are 30-years-old. The basic rule of thumb is that you should have saved 1x your salary by the time you for 30-years-old. That seems realistic, but still a lofty goal for most individuals approaching their 30’s. Fidelity believes this goal should be reached by the time you’re 35 rather than 30, so if you’re not quite there yet, don’t worry. You have another 5 years to reach that goal.… Read More »