Wealth Management

Retirement & Estate Limits for 2018

The IRS issued notices, updating retirement plan limits and estate plan limits for the year 2018.  Here are some of the highlights:

  • Salary Deferral Limit for 401(k), 457(b), 403(b) Plans:  Increasing by $500 to $18,500.  The catch-up contribution (age > 50) remains $6,000.
  • Max contribution to a defined contribution plan increases to $61,000 for 2018, which is the sum of $55,000 plus the catch-up contribution of $6,000.
  • Traditional IRA & Roth IRA contribution limits remained the same in 2018 ($5,550 with a $1,000 catch-up contribution).  However, the deduction and contribution phase-outs increased.
  • SEP-IRA Maximum Contribution Limit:  Increasing by $2,000 to $55,000.
  • The maximum contribution to a SIMPLE IRA in 2017 and 2018 is $28,000, which would require compensation of at least $416,667.
  • Annual Gift Tax Exclusion:  Increasing by $1,000 to $15,000
  • Applicable Gift & Estate Tax Exclusion:  After adjusting for inflation the amount increases to $5,600,000

Social Security Cost of Living Adjustments

Social Security Recipients take Note!  The Social Security Administration (SSA) has announced the cost-of-living adjustment (COLA) for 2018 will be 2%, the biggest increase since 2012.  Congratulations on your raise!

Employees take Note!  The SSA also announced the maximum amount of earnings on which you will have to pay Social Security taxes will increase to $128,700 from the current level of $127,200.  You will continue to pay 6.2% in payroll taxes on wages up to the earnings cap, and all of your wages are subject to the Medicare payroll tax of 1.45%.  Since 2013, individuals with earned income of more than $200,000 ($250,000 for married couples filing jointly) pay an additional 0.9% in Medicare taxes.

Medicare Recipients take Note!  Medicare Part B premiums for 2018 have not yet been announced, but are expected to remain stable at $134/month for most people.  Those with higher incomes are subject to the Income-Related Monthly Adjustment Amount (IRMAA) premium surcharge.  The definition of “higher income” has been lowered, so more Medicare recipients will be caught by IRMAA next year.  Watch out! Medicare premiums for 2018 should be announced in November.

Anaheim Hills Office Re-opened

Please be advised that the Anaheim Hills office is open again and fully staffed.  We want to especially thank our public safety personnel who have gone above and beyond to keep our community safe.

Fire Evacuation – Anaheim Hills

Please be advised that, as of 11:30AM on October 9 2017, the Anaheim Hills office is under mandatory evacuation due to a fast-moving brush fire in the area. The staff has been sent to work in remote offices and does have access to email. Please call the Irvine office with any needs and/or questions – (949) 955-2552.

Equifax Security Breach

As you have likely seen, Equifax (one of the three main credit bureaus) had a large security breach that lasted from mid-May through July. There are a lot of notices and alerts suggesting what you can do to protect yourself, so we wanted to share our thoughts with you regarding proactive measures you might consider taking to protect your personal information.

  1. Freeze your Credit: Each credit bureau allows you the option to freeze your credit, which helps prevent criminals from being able to open new accounts with your information. You can do this online or via phone, but will need to do so directly through the Credit Bureaus. Please be aware that once your credit is frozen, you will have to un-freeze it before applying for any new lines of credit.
    1. Equifax:  https://www.freeze.equifax.com/Freeze/jsp/SFF_PersonalIDInfo.jsp
    2. Experian:  https://www.experian.com/freeze/center.html
    3. TransUnion:  https://freeze.transunion.com/sf/securityFreeze/landingPage.jsp
  2. Opt-Out of Prescreened Credit Offers: You likely have received numerous mailings from credit card companies trying to persuade you to open new credit cards. You can stop this by visiting this website https://www.optoutprescreen.com or calling this number 1-888-567-8688.
  3. Check your Annual Credit Report: Each of the three bureaus allow you one free credit report check per year by visiting this website https://www.annualcreditreport.com. It is important to check this at least once per year to see if you notice any suspicious accounts or activity.