Month: January 2019

It may seem early in the year to think about beefing up your nest egg, but as they say, the early bird gets the worm. And in order to develop a retirement savings plan for 2019, you need know the 2019 limits for retirement account contributions.

The Internal Revenue Service (IRS) sets different contribution limits for different types of retirement accounts. Since they tend to change each year, keeping up with them can be difficult. Plus, if you are 50 or older, you can make additional catch-up contributions.

To simplify retirement account contribution limits, we have listed the 2019 limits to the right. You can make contributions for 2019 until the tax-filing deadline of April 15, 2020.

Traditional IRAs and Roth IRAs 
Contribution limit: $6,000
Age 50 catch-up contribution limit: $1,000 extra

Deferred-contribution plans, such as 401(k), 403(b), and 457 plans
Contribution limit: $19,000
Age 50 catch-up contribution limit: $6,000 extra

SIMPLE IRAs
Contribution limit: $13,000
Age 50 catch-up contribution limit: $3,000 extra

Note that there are also income limits when it comes to retirement account contributions (assuming you are covered by a workplace retirement plan).

You can contribute to a traditional IRA in 2019 only if your adjusted gross income (AGI) is less than $74,000 if you are single or $123,000 if you are married filing jointly. And, the amount that you can contribute starts to phase out if your AGI is more than $64,000 for singles and $103,000 for couples.

You can only contribute to a Roth IRA in 2019 if your AGI is less than $137,000 if you are single or $203,000 if you are married filing jointly. And, the amount that you can contribute starts to phase out if your AGI is more than $122,000 for singles and $193,000 for couples.

This material has been prepared for informational purposes only and is not intended to provide and should not be relied on for tax, legal, or accounting advice.

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“This material has been prepared for informational purposes only and is not intended to provide and should not be relied on for tax, legal, or accounting advice.”

The US Federal Reserve Board (Fed) is currently in the midst of a rate-hiking cycle that began in December 2008. As a result, the federal funds rate (the rate at which banks lend money to other banks overnight) rose from 0.05 percent in December 2009 to 2.19 percent in October 2018.

When the Fed federal funds rate rises, it typically has a ripple effect on interest rates across the entire economy. US Treasury yields, for example, have followed suit, soaring to multiyear highs in October. The yield on the 10-year US Treasury note, for example, exceeded 3 percent to reach its highest level since July 2011.

With interest rates poised to continue rising, US Treasuries may be appealing. To some, 3 percent may seem far too low for a sensible long-term interest rate. For others, it is a reasonable return for the safety of bonds backed by the full faith and credit of the US government.

Additionally, there are other high-yielding alternatives. For example, you may be able to obtain higher yields with only slightly more volatility via non-Treasury government-backed bonds, such as mortgage-backed securities supported by other agencies.

One example is mortgage-backed securities supported by the Government National Mortgage Association (GNMA), which guarantees investments backed by federally insured loans. These securities carry the full faith and credit of the US government and may offer a higher yield than comparable US Treasuries do.

Of course, no investment is suitable for all investors. A financial professional can help you determine whether the mentioned securities are appropriate for your portfolio.