Page 5 - Jupiter Ocean Mile - July '22

Jupiter Ocean Mile, Page 5
Financial Focus

New Limits Expand 401(k), • Traditional IRA – You typically contribute pretax – don’t have a 401(k) or similar plan, you can always deduct
(deductible) dollars to a traditional IRA, and your earnings can
the full amount of your contribution on your tax return, no
IRA Opportunities grow tax-deferred. matter what you earn. But if one or both of you are covered by
• Roth IRA – You invest after-tax dollars in a Roth IRA, an employer-sponsored plan, then your deductions could be
By Sally Sima Stahl so your contributions won’t lower your taxable income, but reduced or eliminated based on your income.
You could spend two, your earnings can grow tax free, provided you’ve had your Single taxpayers can claim the full deduction if your modified
or even three, decades in account at least five years and you’re 59½ or older when you adjusted gross income (MAGI) is $68,000 or less ($109,000 for
retirement. So, to pay for all begin taking withdrawals. married filing jointly), with deductibility decreasing at higher
those years, you’ll probably • 401(k) – A 401(k) or similar plan (such as a 457(b) income levels and phasing out entirely at $78,000 ($129,000
need to take full advantage for state and local government employees or a 403(b) for married filing jointly). But here’s the key point: Compared
of your retirement accounts. for employees of public schools or nonprofit groups) is to 2021, these ranges are $2,000 higher for single filers and
And in 2022, you may have generally funded with pretax dollars and provides tax- $4,000 higher for those who are married and filing jointly –
expanded opportunities deferred earnings. Some employers offer a Roth 401(k), in which means that this year, you might have more opportunities
to deduct retirement plan which employees contribute after tax-dollars and can take to make deductible contributions.
contributions on your tax tax-free withdrawals if they meet the same age and length- And a similar type of increase applies to Roth IRA eligibility.
return. of-ownership requirements as the Roth IRA. In 2022, if you’re a single filer, you can put in up to $6,000
Before looking at what’s changed this year, let’s review So, what’s different about these plans in 2022? First, consider ($7,000 if you are 50 or older) in a Roth IRA if your modified
the key benefits of these accounts: the traditional IRA. If you – and your spouse, if you’re married adjusted gross income (MAGI) is less than $129,000 – up
from $125,000 in 2021. Allowable contributions are reduced at
higher income levels and phased out if your MAGI is $144,000
or more, up from $140,000 in 2021. If you’re married and file
jointly, the respective ranges are $204,000 to $214,000, up
from $198,000 to $208,000 in 2021. Again, higher ranges may
mean more opportunities for you. (Consult your tax advisor to
determine your eligibility to contribute to a Roth IRA or make
deductible contributions to a traditional IRA.)
And finally, the annual contribution limit for 401(k),
457(b) and 403(b) plans is $20,500 – up $1,000 from 2021.
If you’re 50 or older, you can put in an extra $6,500 this year,
for a total of $27,000.
These changes may not seem monumental, but when you’re
saving for retirement, any opportunities to invest and potentially
reduce taxes, of whatever size, can be valuable. So, review your
options to determine how you can help yourself move closer to
your retirement goals.
This article was written by Edward Jones for use by
your local Edward Jones Financial Advisor, Edward Jones,
Member SIPC.
Edward Jones is a licensed insurance producer in all states
and Washington, D.C., through Edward D. Jones & Co., L.P.,
and in California, New Mexico and Massachusetts through
Edward Jones Insurance Agency of California, L.L.C.; Edward
Jones Insurance Agency of New Mexico, L.L.C.; and Edward
Jones Insurance Agency of Massachusetts, L.L.C.
Edward Jones, its employees and financial advisors cannot
provide tax advice. You should consult your qualified tax advisor
regarding your situation.
Contact us at (561) 748-7600, Sally Sima Stahl, AAMS, 1851
W. Indiantown Road, Ste. 106, Jupiter, FL 33458.

Editorial copy appearing herewith is not necessarily the viewpoint of
Seabreeze Publications of Central Florida. Most editorial copy is created by
the homeowners and is edited by their appointed editor.

1102 W. Indiantown Rd., Suite 5, Jupiter, FL 33458
(561) 746-3244
FAX (561) 746-2509

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