McManamon & Co. LLC’s Post

How to Take Advantage of 401(k) Catch-Up Contributions (via U.S. News & World Report): https://ow.ly/nFzQ50Tsbc6 #USNews #smallbusiness #smallbiz #investmentplans #businesstaxes

At some point, you’ve probably heard the financial advice that says you should max out your 401(k)—i.e., contributing the maximum allowable limit each year. You can contribute up to $22,500 of your annual salary for this calendar year...

*Hot of the press* The IRS just announce the 2025 401k contribution limits. The maximum annual contribution for those under 50 will increase to $23,500 and the catch-up contribution for those over 50 will remain $7,500. In a new twist, employees between the ages of 60 and 63 will be allowed to contribute an additional $4,000 on top of the catch-up.

At some point, you’ve probably heard the financial advice that says you should max out your 401(k)—i.e., contributing the maximum allowable limit each year. You can contribute up to $22,500 of your annual salary for this calendar year...

💰 Discover the benefits! State-mandated IRA plans vs. Plan Sponsored 401(k). With IRA plans, you can contribute $7,000; 401ks allow contributions up to $23,000! No employer matches in IRAs, but 401ks offer tax-deductible contributions and profit-sharing. With Secure Act 2.0, there are lucrative tax credits over 5 years! Don't miss out on maximizing your savings potential with either plan. 💼 #retirementplanning #taxcredits #401kbenefits"

A lot of people get confused when they see a "Roth" option when setting their 401(k) contributions. They think that this is a Roth IRA or that participating would mean forgoing their employer match. Both asssumptions are mistaken. This is nothing more than a Roth 401(k). Your contributions go in, your employer matches (but matching is still pre-tax), and the funds get invested just like any other 401(k). The huge benefits here are that contribution limits are way higher than a Roth IRA, and there are no income phaseouts that prevent you from contributing.

2025 401(k) Limit Increases The IRS announced the 2025 401(k) limit increases for the amount individuals can contribute to their 401(k) plans in 2025 has increased to $23,500, up from $23,000 for 2024. The IRA limit remains at $7,000. https://hubs.la/Q02YQBzT0

The IRS released the new 401(k) contribution limits for 2025, including some nuances to the catch-up provision. Learn more in my latest piece for Salon.com https://lnkd.in/dTMCUJFf

📊 Choosing the right plan design is crucial for maximizing benefits for both employers and employees. Plan design involves structuring the 401k plan to meet the specific needs and objectives of the company and its workforce. Here’s what you should consider: ✅Traditional vs. Roth 401k: Understanding the tax implications of each type of plan can help employees make informed decisions about their contributions. Traditional 401k contributions are made on a pre-tax basis, while Roth 401k contributions are made after taxes, with qualified withdrawals being tax-free. ☑️Safe harbor provisions: Safe harbor plans offer certain advantages, including exemption from certain nondiscrimination testing requirements. This can simplify compliance and allow highly compensated employees to contribute more to their accounts. ✅Customizing investment options: Offering a diverse range of investment options within the plan allows employees to tailor their portfolios based on their risk tolerance and retirement goals. Providing options such as mutual funds, index funds, and target-date funds can accommodate varying investment preferences. #PlanDesign #RetirementBenefits #401kAdvisorTips For a comprehensive review of your personal situation, always consult with a tax or legal advisor. Neither Cetera Advisor Networks LLC nor any of its representatives may give legal or tax advice.

Research shows that complying with the new SECURE 2.0 rules are one of the top concerns for plan sponsors. However, preparing for the possibility of a DOL audit is not too difficult. Among recommendations to be prepared include documenting any decisions made concerning the plan and keeping records organized. See what other best practices are recommended for employers who offer a 401(k) plan. https://lnkd.in/gB_4UZxH #retirementplans #401k #SECUREAct