Will 401k and HSA Contributions Be Changed in 2018?

As we look ahead to the new year, many individuals are curious about potential changes to their 401k and HSA contributions in 2018. Both of these investment accounts offer tax benefits and help individuals save for retirement and healthcare expenses. Let's break down the possible changes and how they could impact your finances.

Starting with the 401k contributions, the IRS usually adjusts the maximum contribution limits each year based on inflation. For 2018, the maximum contribution limit for 401k accounts increased to $18,500 for individuals under 50 and $24,500 for those 50 and older. This change provides an opportunity for individuals to save more towards their retirement goals while reducing taxable income.

On the other hand, Health Savings Accounts (HSAs) are also subject to annual contribution limit adjustments. In 2018, the contribution limits for HSAs slightly increased to $3,450 for individuals and $6,900 for families. HSAs offer triple tax benefits - tax-deductible contributions, tax-free growth, and tax-free withdrawals for qualified medical expenses, making them a valuable savings tool for healthcare costs.

It's important to note that contribution limits are subject to change by the IRS, so staying informed about updates is crucial for maximizing your savings potential. By taking advantage of both 401k and HSA accounts, individuals can secure their financial future and prepare for any unexpected expenses that may arise.

With the New Year fast approaching, many people are understandably curious about how their financial planning, especially for retirement and healthcare, may be impacted by changes to 401k and HSA contributions in 2018. These accounts are not just ordinary savings accounts; they are powerful tools designed to maximize your savings growth while minimizing your tax burden.