As is the case each year, important numbers – related to income taxes, retirement, gifts and Social Security – are adjusted to reflect changes in the Consumer Price Index (CPI) or in regard to changes in the law. The folks at T. Rowe Price put out a cheat sheet on all of these number, and they were kind enough to send it to me. Here are 8 key financial numbers for 2015.
It’s important to understand that these numbers apply in the year going forward. They do not apply to 2014, which is the year for which we are currently filing our income taxes. You’ll find links in this article to the 2014 numbers if you need them.
Retirement Plan Contributions Limit
Retirement plan contribution limits have been increased by $500 over 2014, except in regard to IRA contributions, both traditional and Roth. They’re unchanged from last year.
|Plan||Under Age 50||Age 50 and Over|
|401(k), 403(b), SAR-SEP, 457(b), TSP1||$18,000 ($17,500 for 2014)||$24,000 ($23,000 for 2014)|
|Traditional and Roth IRAs||$5,500 (unchanged from 2014)||$6,500 (unchanged from 2014)|
|SIMPLE IRA and SIMPLE 401(k)||$12,500 ($12,000 for 2014)||$15,500 ($14,500 for 2014)|
Income Limits for Roth Contributions
The Roth IRA contributions income limits for both singles and married filing jointly has been increased by $2,000 across the board over 2014.
|To contribute to a Roth IRA||Single||Phased out: $116,000–$131,000
($114,000–$129,000 for 2014)
|To contribute to a Roth IRA||Married filing jointly||Phased out: $183,000–$193,000
($181,000–$191,000 for 2014)
Income Limits for Traditional IRA Deductibility
Traditional IRA contribution income limits for singles has increased by $1,000 from 2014. For married filing jointly, it’s up $2,000 over last year. Remember, these income limits apply only if either you or your spouse are covered by an employer sponsored plan. If neither of you are, then there are no income limits.
|Single - Not eligible to participate in an employer retirement plan||Full|
|Single- Participating in an employer retirement plan||Phased out: $61,000–$71,000 ($60,000–$70,000 for 2014)|
|Married Filing Jointly - Neither you nor your spouse is eligible to participate in an employer|
|Married Filing Jointly - You are not eligible to participate in an employer retirement plan, but your spouse is||Phased out: $183,000–$193,000 ($181,000–$191,000 for 2014)|
|Married Filing Jointly - You participate in an employer retirement plan||Phased out: $98,000–$118,000 ($96,000–$116,000 for 2014)|
Annual Gift Exclusion
There is a limit on how much money you can gift to another person without incurring the dreaded gift tax. This applies only to the donor, as there is no tax applicable on the receipt of a gift from another person.
|Lifetime Gift and Estate Exclusion||529 Five-year Forward Averaging|
|Each individual can gift $14,000 this year|
(unchanged from 2014) per recipient without
|Federal estate tax rate maximum is 40%. Gifts over the annual gift tax exclusion amount|
are counted against the $5,430,0007 unified
lifetime gift and estate tax exclusion amount. State estate tax rates and structures vary.
|Each individual can contribute up to $70,000
(i.e., $14,000 annual gift tax exclusion amount
times 5) in 2015 (unchanged from 2014) per beneficiary and “average” it for gift tax
exclusion over five years, making no additional
gifts to that beneficiary during that time.
Income Tax Rates
Tax brackets have increased again for 2015.
|Marginal Tax Rate|
(aka “Tax Bracket”)
|Taxable Income - Single||Taxable Income - Married Filing Jointly and Qualified Widow(er)s||Long-Term Capital Gains/Qualified Dividends Rate|
|39.6%||Over $413,200||Over $464,850||20%|
Social Security Full Retirement Age
How much you will collect in Social Security benefits is determined by your year of birth. This information doesn’t get updated every year the way other numbers in this article do, but it’s worth revisiting since we’re all a little bit closer to retirement than we were a year ago.
|Birth Year||Full Retirement Age|
|1943 through 1954||66|
|1955||66 and 2 months|
|1956||66 and 4 months|
|1957||66 and 6 months|
|1958||66 and 8 months|
|1959||66 and 10 months|
|Born 1960 or later||67|
(Source: Social Security Administration‘s Retirement Planner: Full Retirement Age. )
Maximum Annual Social Security Benefit Amounts by Age
This Social Security number is updated annually. Below are the benefit maximums and averages for 2015. 62 is the earliest age at which you can collect benefits, and the amount increases the later you begin. There is however no advantage to delaying initiating of benefits past age 70, as the amount is no longer increased as a result of postponement.
|Age When Initiating Benefits||62||Your Full Retirement Age||70|
|Annual Benefit Amount||The smallest possible||"Full" - but not the largest possible||Largest possible|
|2015 Maximum Annual Benefit||$23,967||$31,956||$42,182|
|2015 Average Annual Benefit||$11,952||$15,936||$21,036|
Social Security Retirement Earnings Test
An increasing number of people are having to supplement their Social Security benefit with earned income. Here are the income limits – and penalties – for working while collecting benefits at various ages. The penalties are most severe if you retire prior to reaching your full retirement age, but there are no limits on earned income once you reach it.
|Before the year you reach FRA|| $15,720—$1 of benefits is withheld temporarily* for every $2 earned
above this amount
|In the year you reach FRA, but before the month you reach FRA||$41,880—$1 of benefits is withheld temporarily* for every $3 earned
above this amount
|In the month you reach FRA and later||No limit|
*The use of the word “temporarily” refers to the fact that benefits are recalculated when you reach your full retirement age (FRA), to account for amounts withheld, and increased thereafter.
You can download a pdf of these key financial numbers with this link–Key Financial Numbers 2015Topics: News