Hereâ€™s what the experts are saying about the 2015 economy â€“ and four ways that it could directly impact your retirement.
Long story short, 2015 looks like it could be a very good year from a fiscal perspective. According to the financial forecasters at Kiplinger, the U.S. economy appears to have recovered: Unemployment levels have dropped to just 6.1 percent, and inflation is in check. Wall Street is doing spectacularly well and appears to be headed for more growth in the New Year.
Spending on recreation and other consumer services is likely to increase as incomes rise, pushing growth over the 3 percent mark by the end of the year. Healthcare spending looks like it will pick up as consumers and providers get used to the new rules, while spending on utilities should stabilize once energy prices stop falling. On the legislative side, 2015 will bring certain changes to Social Security, 401(k) plans, Medicare, and IRAs.
Here are four ways in which your retirement funds will be directly impacted in 2015.
Social Security Increase
This is good news for all retirees. Those receiving benefits will see a 1.7 percent increase in payments each month due to a cost-of-living adjustment starting in 2015. If youâ€™re still working, your tax rate will remain the same at 6.2 percent. The taxable limit on Social Security wages will also increase from $117,000 to $118,500.
Medicare Increase on Deductibles.*
If you have Medicare, youâ€™re probably familiar with its different parts: A, B, C, and D. While not all parts of Medicare are seeing changes this coming year, certain ones will. According to Medicare.gov, the part B plan rate will remain fixed â€“ as will its deductible.Â If you receive assistance for inpatient services, however, youâ€™ll be paying a larger deductible. Part D plans will see premium increases as high as 4 percent. If youâ€™re unclear about how your Medicare plan might be affected in the New Year, just call SelectQuote Senior at 1-888-562-1304.Â Our licensed agents can answer all of your questions about Medicare, and make sure you have the supplemental coverage you need at a price thatâ€™s right for you.
401(k) Retirement Contribution Increase
In 2015, the overall 401(k) contribution limit for those who are under 50 will increase by $500 â€“ from $17,500 to $18,000. For those in the 50+ category, the overall contribution limit will increase by $1,000 â€“ from $23,000 to $24,000 â€“ while the catch-up contribution limit will increase by $500 (from $5,500 to $6,000). So if youâ€™ve fallen behind in your retirement planning, take note!
New IRA Limits
Your annual IRA retirement fund contribution will remain fixed at $5,500 in 2015. If you have a 401(k), you can contribute to an IRA in order to receive tax advantages â€“ as long as your income remains within certain limits. The new limits will increase by roughly $1,000-$2,000 from last year. Additional IRA limit changes will affect individuals and married couples alike.