2018 IRS Contribution Limits For Tax Advantaged Accounts

Halloween parties are right around the corner and everyone is focused on what Game of Thrones character they are dressing up as this year. But while everyone was out last week gathering their gear for the dragon princess costume (nailed it) the IRS released the new contribution limits for tax advantaged accounts for 2018. The big three that everyone should be concerned with are the 401(K), IRA, and HSA accounts.

2017/2018 Contribution Limits

2018 Contribution Limits

Does It Matter?

Hopefully it does for you because you have been taking advantage of your 401(k), IRA, and HSA. Those who have been maxing out these accounts and investing in a diversified portfolio have been rewarded handsomely during this bull market. The reality is most people do not take advantage of these accounts. Whether it is lack of access, mistrust of the stock market or people being misinformed many are missing out.

I Encourage You To Do Something.

I will spare everyone the compound interest calculator showing the example of what the extra $550 contributed over 40 years could mean at retirement…not! It’s $153K after 40 years of growth @ 8%! Everything adds up over time take advantage of the wins you are given today because these could be changed in the future.

If you are still working your way out of debt, or building to the savings level to be able to max out your tax advantaged accounts keep going! Stay motivated frequent sites like this and remember the reasons you are working so hard. The worst thing you can do is nothing make sure you are progressing in some way every year. The average consumer will run out and drop a grand on the iPhone X yet they have trouble coming up with $400 dollars for an emergency. Do something that lasts in 2018 and put your money to work for you!

Happy Halloween!

What Are Your Thoughts?

  1. Are you maxing out your tax advantaged accounts?
  2. Does your employer offer a 401(K) and HSA?
  3. What are you dressing up as for Halloween?
Spread The Wealth!

12 Comments on “2018 IRS Contribution Limits For Tax Advantaged Accounts”

  1. My wife and I individually and collectively take advantage of everyone one of these contribution opportunities that we can. We all pay so much in taxes (sales tax, property tax, state income tax, federal income tax, etc.) it’s important to take advantage of every break or tax deferral that you can. Minimizing taxes and investment fees are two things you can control, so it’s best to do so in your quest for financial independence. Tom

    1. Hi Tom,

      I completely agree to often people miss these opportunities when they are available. I think people don’t realize that they will never be able to go back and fill up these tax advantaged accounts after the year has passed. For those with the ability and resources to max out these accounts it is a great opportunity to really sock it away. Kudos to you and your wife for taking advantage.

      Thanks,
      DM

  2. Although it’s nice that the 401-K contribution was raised slightly, I wish they would’ve raised the IRA contributions as well. I believe we are a bit overdue for that. And $5500 per year really isn’t much in the whole scheme of things.

    1. I agree with you. I feel like those without access to a 401(k) are at a real disadvantage. Regardless we have to do the best we can with what is offered to us so max out anything and everything! Thanks for commenting.

        1. No problem. If using word press take a look under Settings–>Discussion. This is where you can update comment settings and might help you fix the problem, good luck!

  3. Interesting to know the contribution limits- I am guessing the 401K is similar to the RRSP in Canada. I still can’t believe the iPhone X is $1000 and people are paying for it! I would much rather invest that money instead, like a good little PF blogger!

    1. Yes, very similar. Is the RRSP open to every Canadian citizen or is it employer sponsored? It is pricey for sure, if you can own it and not have it affect the overall plan then no worries. It is when people buy it and have nothing in the way of investments and savings to show for the work they do all year that I can’t understand.

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