Wednesday, December 06, 2006

PSA: 401k Limit Increases in 2007

This is your official Public Service Announcement: The Federal limit on 401k deductions is increased from $15,000 to $15,500 in 2007. Check your plan! See if you can be doing a little more!

Remember: Nobody can screw up social security better than the American Congress and $DEITY help us, the generation in charge of our retirement will be even more self-absorbed than this one!! And sick of “carrying” all the baby boomers and, uh, the rest of us. So act now to CYA, or don’t come crying to me that you don’t like the taste of the new, improved Purina!

Plan for the worst and be pleasantly surprised, that’s my fiscal motto.

I would also like to remind everybody that when you do a 401k deduction from your paycheck, your tax savings are immediate. So, putting $250 into your 401k does not mean you have $250 less from your paycheck – depending on your situation, it may be as little as half that lost from your net.

Go to Paycheck City, play around with it using your own actual situation. You may be surprised just how much you can save.

No 401k but you are working, you’ve got up to $4,000 to your IRA ($4,500 if you’re over 50). Doesn’t go up this year, darn the luck, but does go to $5,000 in 2008. Reduces taxable income, woo hoo, but you have to wait until Tax Time for the benefit, feh.

If you are married and not working but your spouse is, two words: Spousal IRA. This is up to $4,000 in tax deductible savings for those under 50, $4,500 for those over. Check it out. Again, reduces taxable income at Tax Time.

OK. There you go. That’s my retirement planning pep talk for the day. Party on, y’all.


21st Century Mom said...

Thanks for the hot tips. How unfair is it that a supported spouse and a single working person get the same number of tax deductable dollars to work with? Not fair at all! The single working person should get more.

Anyhow, about that website
1). You need to re-do the link. It has
2). It requires a registration that tells them who you work for (or a made up company).

Since I'm contributing 15% of my gross income I'm passing but thanks for the hot tip!

Very Herodotus said...

I wish I could take advantage, but honestly I'm thinking of changing my contributions from 10% to 0% just to increase my cash flow. It sucks, I know, and I'm not proud of it. But the only way out is to refi my mortgage from a 15year to a 30year, and I really really don't want to do that. I'd enjoy being in a position to plan way ahead, but right now I have to focus on the monthly cash flow.

Mother of Chaos said...

Gah. I don't remember having to do a registration...I redid the link, tho, so it should take you straight to the paycheck calculator.

If I ran the world, there'd be no limits. Everybody would get the same treatment, period. Married, unmarried, shouldn't matter. We keep trying to be "fair", and all we ever seem to do is shoot ourselves in the foot.

There would also be no alarm clocks. None. Each person would operate within his or her own biological norm for wakey-wakey-ness.

But that's another rant for another day.