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The amount you and your employees can save for retirement is going up slightly in 2025
November 12, 2024
Categories: 401(k), 403(b), 457 plan, inflation, IRA, Retirement, Secure2.0, SEP-IRA, Simple IRA, thrift savings plan
How much can you and your employees contribute to your 401(k)s or other retirement plans next year? In Notice 2024-80, the IRS recently announced cost-of-living adjustments that apply to the dollar limitations for retirement plans, as well as other qualified plans, for 2025. With inflation easing, the amounts aren’t increasing as much as in recent years. 401(k) plans The 2025 contribution limit for employees who participate in 401(k) plans will increase to $23,500 (up from $23,000 in
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IRAs: Build a tax-favored retirement nest egg
January 30, 2024
Categories: #hh, Investments, IRA, Retirement, Roth, Secure2.0
Although traditional IRAs and Roth IRAs have been around for decades, the rules involved have changed many times. The Secure 2.0 law, which was enacted at the end of 2022, brought even more changes that made IRAs more advantageous for many taxpayers. What hasn’t changed is that they can help you save for retirement on a tax-favored basis. Here’s an overview of the basic rules and some of the recent changes. Rules for traditional IRAs You can make an annual deductible contribution
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Should your business offer the new emergency savings accounts to employees?
January 29, 2024
As part of the SECURE 2.0 law, there’s a new benefit option for employees facing emergencies. It’s called a pension-linked emergency savings account (PLESA) and the provision authorizing it became effective for plan years beginning January 1, 2024. The IRS recently released guidance about the accounts (in Notice 2024-22) and the U.S. Department of Labor (DOL) published some frequently asked questions to help employers, plan sponsors, participants and others understand them. PLESA
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11 Exceptions to the 10% penalty tax on early IRA withdrawals
November 14, 2023
Categories: #hh, Early Withdrawal, IRA, Secure2.0, SEP-IRA, SEPP, Simple IRA
If you’re facing a serious cash shortfall, one possible solution is to take an early withdrawal from your traditional IRA. That means one before you’ve reached age 59½. For this purpose, traditional IRAs include simplified employee pension (SEP-IRA) and SIMPLE-IRA accounts. Here’s what you need to know about the tax implications, including when the 10% early withdrawal penalty tax might apply. Penalty may be avoided In almost all cases, all or part of a withdrawal
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Facing a future emergency? Two new tax provisions may soon provide relief
October 24, 2023
Categories: Early Withdrawal, Secure2.0
Perhaps you’ve been in this situation before: You have a financial emergency and need to get your hands on some cash. You consider taking money out of a traditional IRA or 401(k) account but if you’re under age 59½, such distributions are not only taxable but also are generally subject to a 10% penalty tax. There are exceptions to the 10% early withdrawal penalty, but they don’t cover many types of emergencies. Good news: Beginning in 2024, there will be new relief