2008 Pension Plan Contributions
401(k), 403(b) and 457 Plans |
|
|
|
Maximum annual contribution to 401(k), 403(b) and 457 plans |
|
$15,500 |
|
Catch up contribution for those aged 50 and over |
|
$5,000 |
|
Maximum for those aged 50 and over |
|
$20,500 |
|
|
|
|
|
IRAs: Roth and Contributory |
|
|
|
Maximum annual IRA contribution |
|
$5,000 |
|
Catch up contribution for those aged 50 and over |
|
$1,000 |
|
Maximum for those aged 50 and over |
|
$6,000 |
|
|
|
|
|
SIMPLE IRA: Employee Deferral |
|
|
|
Maximum annual contribution |
|
$10,500 |
|
Catch up contribution |
|
$2,500 |
|
Maximum for those aged 50 and over |
|
$13,000 |
|
|
|
|
|
SEP-IRA |
|
|
|
Maximum annual contribution |
|
$46,000 |
|
|
|
|
|
If you are covered by any of the above plans, and can maximize your contributions, we recommend that you visit with your Benefits Department and take advantage of these tax-deferred savings vehicles.
Social Security
Social Security benefits will rise by 2.3% in 2008. That's a good thing. The age at which one can collect full benefits is also increasing. For those born in 1941, full retirement is age 65 years and 8 months; for those born in 1942, it’s 65 years and 10 months. For those born between 1943 and 1954, full retirement age is 66. Full retirement age will gradually increase to 67 for those born in 1960 and later.
Retirement earnings tests are imposed on individuals who are working and collecting Social Security benefits. The maximum amount of earnings to still receive full benefits is as follows:
- Full retirement age: no limit on earnings
- Year full retirement age is reached: $36,120. For every dollar earned over this $36,120 threshold, $1 in benefits for every $3 in benefits will be withheld (or taxed).
- If you are under full retirement age, your earnings limit is $13,560. For every dollar earned over this threshold, $1 in benefits will be withheld (or taxed) for every $2 over the $13,560.
Medicare Premiums
Part B Medicare premiums are also increasing. In accordance with the passage of the Medicare Modernization Act, beneficiaries with high MAGI (modified adjusted gross income) will be required to pay more towards their Medicare benefits. This new law requires that the standard monthly premium for Part B must be sufficient to cover at least 25% of the Medicare program's cost for aged beneficiaries, including the cost of maintaining a reserve for unexpected spending increases. The federal government pays the remaining 75%.
MAGI Range for single taxpayers |
MAGI Range for couples filing jointly |
Part B Cost |
$82,000 - $102,000 |
$164,000 - $204,000 |
$122.20 |
$102,000 - $153,000 |
$204,000 - $306,000 |
$160.90 |
$153,000 - $205,000 |
$306,000 - $410,000 |
$199.70 |
Over $205,000 |
Over $410,000 |
$238.40 |
As always, if you have any questions regarding your financial planning, please do not hesitate to give us a call. We'll be happy to help you.
(c) R.W. Roge & Co.
www.rwroge.com |
