Social Security and Numbers to Know in 2017
Sorry, this is not like a fortune cookie where I reveal your lucky numbers (“Confucius says buy stocks on days 14, 28, 200, and 360 of the year.”). Rather, here is a quick update on new retirement savings limits and other info you can use when planning your financial year.* You are doing that right now, aren’t you?
Social Security Cost of Living Adjustment: A whopping .3%. That’s $5 to the average Social Security recipient.
Social Security tax for high earners: The amount you earn before Social Security tax stops being deducted from your paycheck goes up to $127,200. It was $118,500 in 2016.
Higher earnings allowed for Traditional IRA deductions: If you have a 401(k) at work, you cannot deduct your IRA contribution if you make above $72,000 in 2017 ($119,000 for married couples). If you don’t have your own 401(k) but are married to someone who does, the earnings limit is $196,000. If you don’t have access to a workplace retirement plan, there is no limit to how much you earn and still be able to deduct your traditional IRA contribution.
Higher Roth IRA earnings limit: The maximum amount you can earn and still contribute to a Roth IRA is going up $1,000 ($2,000 for couples) to $133,000 and $196,000 respectively. Note there are phase outs to the earnings limits for both IRAs and Roth IRAs, but that’s too many words for this blog.
Last, if you are taking Social Security before your full retirement age, the amount of earned income you can have before having 50% of your benefit withheld for 2017 has gone up to $16,920.
All contribution limits to 401(k)s and other retirement programs have stayed the same at $18,000 plus $6,000 catch up for those 50 and older. IRA contribution limits also remain the same at $5,000 with a $1,000 catch up for those 50 and older.
There you are, Savers! Now go forth and make good financial decisions!