New 401(k) limits let you save more for retirement

(InvestigateTV) — Americans have $8.87 trillion dollars invested in 401(k) retirement s according to the latest data from the Investment Company Institute, and this year participants can invest even more.

The Internal Revenue Service (IRS) is required by law to review the tax-sheltered contribution limit annually and then adjust it based on the cost-of-living, helping participants ensure their investment keeps pace with yearly inflation.

Michael Joyce with CW Advisors encouraged plan holder to take advantage of the new, higher limit.

“This year people who are under age 50 can it up to $23,500 into their 401(k) plan,” Joyce said. “If you’re over age 50, you can put in an extra $7,500 as a catch up.”

He said starting this year there’s a super catch up for people ages 60 to 63 where they can put an extra $11,250 dollars over that $23,500.

“Usually, earlier in your working life you haven’t been able to save as much money, but you may have the ability to save more the closer you get to retirement so that allows you to put more money into a retirement plan,” he explained.

Joyce recommended talking to a financial advisor, but many of them urge clients to utilize their company’s 401(k) whenever possible because they often offer a match, essentially giving participants free money.

Maxing out contributions is a goal to set, so there will be more money at retirement.

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