There are new tax incentives to encourage you to save for retirement. Tom Iorio, an Edward Jones financial advisor in Rantoul, says the government has increased the amount you can put in an individual retirement account or a 401(k) and enjoy tax deferral by $500. The IRA limit is now $5,500, or $6,500 for those over 50. For a 401(k), the limit is $17,500, or $23,000 for those over 50.
Click here for summary
He says these incentives really do induce people to save. “The deductibility of being able to put into retirement accounts, and the ability to have tax deferral on those earnings until you take‘em out, that’s significant. That gives people a rationale and a reason sometimes to make those contributions, whereas otherwise, if it was all on an after-tax and taxable basis, they may not be so inclined to do so,” he said. Iorio says Americans do not save enough for retirement. Iorio is in Washington, meeting with members of the Illinois congressional delegation and their staffers, urging them to keep these retirement saving incentives in place.