Will the retirement benefits remain same or change in 2015?
1. Change in Medicare plan
Retirement plan benefits keep on changing and there are some important changes happening in the coming year. Go through this article to know about the retirement benefits in the coming year, 2015.
If you are under Medicare Part B plan, you can continue enjoying to pay $147 deductible per year; the value will remain unchanged in the coming year. The standard premium will also be $104.90 per month. However, you will have to pay more if you fall under high-income beneficiary group. But, in case of Medicare Part A plan, the deductible amount for hospital inpatient will increase to about $1260 from $1216. Though it is not yet confirmed, but as per researchers, Medicare Part D premium is also expected to rise by about 4% from its previous rate. The maximum deductible amount is supposed to be $320
Tips to save more with Medicare plan:
- Some pharmaceutical companies help people under Medicare Plan D through Pharmaceutical Assistance Program for the medicines you need to have
- You can switch to lower-cost or generic drugs to save money
2. Individual Retirement Account (IRA) benefits
There is a good news for you if you have an IRA account and you're at least 50 years of age; if yes, then you can contribute about $1000 over regular contribution limit, that is, $5500. If you have retirement account at work and your modified adjusted gross income falls between $(98,000 - 118,000) for couples and $(61,000 - 71,000) for individuals, then you can claim tax deduction if you make contribution to your traditional IRA account. Even if you do not have a workplace retirement plan but your spouse has a 401(k) plan, you can claim tax deduction on your IRA contribution if your income is between $(183,000 - 193,000) next year (2015). Along with these benefits, the Roth IRA income limits will also increase to $(183,000 - 193,000) for couples and $(116,000 - 131,000) for individuals. If your qualifying income criterion is more than this, then you can convert your traditional IRA to a Roth IRA account.
Benefits of converting your traditional IRA to a Roth IRA:
- At retirement, you can get tax free stream of income
- Roth IRA doesn't have any age limit to stop making contribution
3. 401(k) retirement savings plan advantages
The contribution in 401(k) retirement account will also increase to $18,000 from $500 in the coming year. If you are less than 50 years of age, in the 25% tax bracket and you contribute maximum amount to your traditional 401(k) account, then you'll be able to save $4500 on your federal income tax. And, if you are at least 50 years of age, then your contribution is supposed to increase to about $6000.
Tips to increase your 401(k) contribution:
- Split your income raise, if any, with your retirement fund so that there isn't any decrease with your take home pay amount
- Opt for automatic contribution increase if your company allows you to do so
4. Savers Credit eligibility
Retirement Savings Contribution Credit (Savers Credit) is eligible for people whose AGI or Adjusted Gross Income is less than $45,750 for households, $30,500 for singles and $61,000 for married couples. At the most, you can have saver's credit worth of $2,000 as a married couple and $1,000 as an individual.
Special rules to apply to Saver's Credit:
- You should be an eligible taxpayer of at least 18 years of age
- You cannot take the credit if you are a full time student
5. Changes in Social Security benefits
Good news for Social Security recipients as they will be benefitted about 1.7% more payment in the coming year owing to the cost-of-living adjustment. The maximum taxable earning amount will also increase to $118,500 in 2015 from current rate (2014) $117,000. However, in case you haven't created an online account yet, you can expect a mail from the Social Security administration. They are supposed to mail people, who haven't created an online account, who will be turning 25, 30, 35 and so on till the age of 60.
Tips to increase your Social Security benefits:
- Try to work for at least 35 years of age
- Work till you attain your retirement age
6. New retirement account myRA
Apart from above, you can expect a new type of retirement account, in 2015, myRA - a Roth account. One of its unique benefits is that Government has ensured that it won't lose value. You can open such an account with deposit amount as less as $25 and then opting for direct deposit of a minimum of $5 every payday. Another important benefit of myRA is that it will not affect you if you change your job since it won't be tied with your job. However, there's an eligibility criteria. To qualify, your annual income should not exceed $129,000 if you want to have an individual account and not more than $191,000 if you want to open jointly with your partner. You can continue using this retirement account for 30 years or until your account balance is $15,000, after which it will automatically get transferred to a private-sector retirement account. myRA is basically for low and middle income group people who do not have access to employer-sponsored plan.
Anytime, if you need help on handling personal finance issues, then it is better to consult a personal finance adviser. He/she can guide you with tips regarding how you can have more money at retirement. To have a sufficient amount at retirement you need proper planning and it is better to start doing it at a comparatively young age. This helps you plan correctly and enjoy a stress free retired life.