401(k) Limits Remain the Same for 2014

If you’ve been putting the maximum amount of money into a tax-deferred retirement plan and were hoping to set aside even more next year, you’ll be disappointed by the IRS’s decision not to increase the limits. The maximum contribution to 401(k) plans in 2014 will stay at $23,000 – $17,500 plus $5,500 in catch-up contributions for people 50 and older. The contribution limit for Individual Retirement Accounts (IRAs) will also stay the same for people 50 and older – $6,500 per year, …

What Old Brains? Older Proves Wiser in Financial Decisions

Old, schmold. Our brains may be getting a little slower as we age, but we more than make up for it in experience when making economic decisions, a new study finds. The study, by researchers at the University of California, Riverside and Columbia University, tested two groups of subjects – 173 younger (ages 18 to 29) and 163 older (ages 60 to 82) – on how well they understood financial information and made economic decisions. Related: Does My Financial Adviser …

Americans’ Financial Plan Is Not to Plan

Some people might prefer bathing the dog to sitting down and creating a financial plan. However, adults who take the time to develop a comprehensive financial plan are more likely to manage their money successfully, and are more confident about reaching their goals, like saving for retirement or paying off credit-card debt, according to a report released Wednesday. Unfortunately, they’re in the minority. Only one-third (32 percent) of some 1,002 people surveyed say they’ve created a comprehensive financial plan. And …

New Thinking about Budgeting for Your Second Adulthood

This is a guest post by Bart Astor. For years financial planners have been preaching that in your retirement years you should plan on spending about 70% of your current income. This number was based on a number of factors, including: You don’t need to continue to save for your retirement years You won’t be paying into Federal Insurance Contributions Act Tax (Social Security and Medicare) You won’t have commuting and work expenses Your house will be close to or already …

Retirement Savings: Are We There Yet?

OK, so maybe you won’t be buying a second home in Aspen in retirement. But a new analysis of our 401(k) plans suggests we’re inching closer to other retirement goals, like saving enough money so that we won’t have to wrestle the cat for food when we’re older. Though it may not seem like enough just yet, our 401(k) balances have hit their highest levels in seven years, an average of $81,240 in 2012, according to human resources consultant Aon …