Darn! I don’t know about you, but for me, the year has absolutely flown by! After Thanksgiving, we all get bogged down with holiday plans, then before you know it, the year is over. That means RIGHT NOW is the perfect time to do one last retirement plan checkup and make sure you are absolutely maxing out your 2017 retirement plan contributions.
If you don’t max out your retirement plan contributions, you will give up extra employer contributions and lower the compounding investment growth of your nest egg. You will also be passing up another huge benefit—lowering your current tax liability.
Time is running out for you to hit the statutory limit on employee deferrals for 401(k)/403(b)/457 plans—they must be deferred from 2017 paychecks on or before December 31, 2017. Many of us have one or two pay periods before the end of the year to max out these contributions. Check your year-to-date contributions, then add that number to your estimated December contribution. If you come up short of the maximum, you still have time to tweak the last couple of contributions before the year-end deadline.
And while you’re at it, take note that the contribution limits for 401(k)/403(b)/457 plans will increase by $500 in 2018. Employers may not automatically adjust for it—you may need to contact your HR department or log into your company’s web portal to increase your paycheck deferrals.
The table below lists the 2017 and 2018 retirement plan contribution limits.
One final important item: if you have had a change in marital status or family structure, be sure to update your plan’s beneficiary form to incorporate your wishes for beneficiaries and contingent beneficiaries.
For a more detailed reference on workplace retirement plan contribution limits, here is a link to the IRA page on 2018 retirement plan limits.