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8 Ways to Have More Money for Retirement

Whether you started saving early in life or find yourself playing catch-up, the need for retirement funds never decreases. Here are 8 ways to maximize your retirement accounts and other savings to make sure that you have the money you need – and want – for a fulfilling life after you retire from a career.

  1. Traditional retirement accounts
    In 2015, you can contribute up to $18,000 to a 401(k), 403(b), 457 or the Thrift Savings Plan (for federal government employees). Individuals age 50 or older can also contribute an additional $6,000 in catch-up funds. The 2015 limit for traditional and Roth IRAs is $5,500, plus an extra $1,000 for age 50 or older. For singles, the ability to contribute to a Roth IRA phases out starting at $116,000 modified adjusted gross income (MAGI), and is disallowed at $131,000. For married couples filing jointly, the Roth phase out starts at $183,000, and is disallowed at $193,000 MAGI and above.
  1. Retirement accounts in addition to company retirement plans
    The rules for tax deductible contributions to a traditional IRA are different if you’re covered by a company plan. It depends on your income. You may deduct the entire amount of the contribution on your 2015 tax return if you are: Single with MAGI of $61,000 or less or married with $98,000 or less MAGI. If your spouse is covered by a work­place retirement plan but you’re not, you can deduct the entire contribution as long as your joint MAGI doesn’t exceed $183,000.
  1. Annuities
    IRA owners and 401(k) participants can take advantage of a new rule and invest the lesser of up to 25% of their account balance or $125,000 in a deferred income annuity.  Unlike other retirement accounts, minimum distributions are not required at age 70 ½.
  1. Military benefits
    For 2015, deployed members of the military can contribute all of their tax-exempt combat pay up to $53,000.
  1. Self-employed pensions (SEPs)
    If you own your own company in 2015, you can contribute the lesser of $53,000 or up to 20% of net self-employment income. If you’re 50 or older by the end of 2015, you can add a $6,000 catch-up contribution.
  1. Company pensions
    For 2015, the government insures annuity payments up to $60,136 from company pensions through Pension Benefit Guaranty Corp. (www.pbgc.gov). The PBGC pays up to $5,011 a month if you’re 65 when you start receiving benefits and your company goes out of business with an underfunded pension.
  1. Health Savings Accounts (HSA)
    You can save on taxes by opening a HSA, and the funds in the account don’t expire. HSAs are only available for certain eligible high deductible insurance plans ($1,300 for singles, $2,600 for families). Contribution amounts are $3,350 for individual coverage or $6,650 for family coverage.
  1. Reverse Mortgages
    You may want to borrow money based on the value of your home. The loan may be paid off from proceeds when the home is sold. The maximum federal loan limit is $625,500. There are costs associated on the front end of the loan, and the cost depends on the amount of money you take. Additional mortgage insurance premiums are required each year.

As with many financial decisions, it is wise to talk with a Salmon Sims Thomas tax advisor before making significant changes. Your personal financial situation, obligations, and goals must enter into the decisions you make now that affect your future.