Thursday's Personal Finance stories
- Employer group fights Calif. pot proposition
- Retirement disaster ahead
- A treat for markets, a trick for the rest of us
- Rate on 30-year mortgages up second straight week
- Jobless claims drop 21,000 to 434,000
The IRS announced Thursday that the maximum amount workers can contribute to 401(k), 403(b), or 457(b) plans will remain unchanged in 2011, at $16,500. Same goes for the catch-up contribution limit people aged 50 and over: unchanged at $5,500.
Of course, plenty of people aren't able to save anywhere near the maximum annual amount, which equals $1,375 a month for the younger folks, and some have argued that those people who can afford to save the maximum are perhaps not in dire need of additional retirement-savings tax breaks. But that's a story for another day.
If you're contributing to a traditional IRA and you take advantage of the tax deduction for doing so, and you are also participating in an employer-sponsored retirement plan, the IRS said Thursday, that tax deduction is phased out for single filers and head-of-household filers with modified adjusted gross income between $56,000 and $66,000 — those dollar amounts are unchanged from this year.
But the income phase-out increased for married couples. Here's what the IRS said in its statement: "For married couples filing jointly, in which the spouse who makes the IRA contribution is an active participant in an employer-sponsored retirement plan, the income phase-out range is $90,000 to $110,000, up from $89,000 to $109,000. For an IRA contributor who is not an active participant in an employer-sponsored retirement plan and is married to someone who is an active participant, the deduction is phased out if the couple's income is between $169,000 and $179,000, up from $167,000 and $177,000."
The income phase-out if you want to contribute to a Roth IRA will rise to $169,000 to $179,000 for married couples, up from $167,000 to $177,000 this year. And that phase-out range rose for singles and heads of household, too. It's now $107,000 to $122,000, up from $105,000 to $120,000. And, if you're married filing separately and an active participant in an employer-sponsored retirement plan, the phase-out range remains $0 to $10,000.
Meanwhile, the income limit for claiming the saver's credit also rises in 2011, to $56,500 for married couples filing jointly, up from $55,500 in 2010; $42,375 for heads of household, up from $41,625; and $28,250 for single filers and married individuals filing separately, up from $27,750.
Phew. You'd think it could all be a little simpler. If only.
—Andrea Coombes , Personal Finance editor
A California ballot initiative that would legalize adults' recreational use of small amounts of marijuana is raising questions about its potential impact on workplaces in the Golden State should the measure pass on Nov. 2.
Read more on Calif. Chamber of Commerce fights pot proposition.
Don't let the rally in the stock and bond markets fool you. Many Americans are still hurtling towards a retirement disaster. Few realize it. Even many of those running the big pension funds don't know.
Read more on retirement disaster ahead.
Interest rates on fixed-rate mortgages ticked up this week, but 5-year adjustable-rate mortgages hit their lowest levels since 2005, Freddie Mac said Thursday.
Read more on rate on 30-year mortgages up second straight week.
Wall Street has shifted its financial contributions away from Democrats in this election cycle and into the coffers of Republicans with two goals in mind: to ease tougher new regulations on the financial industry and prod some priorities beyond the Capitol Hill gridlock.
Read more on Wall St. banking on GOP to ease new rules.
Here's a liberal's version of a parallel universe. President Barack Obama's surprise announcement that he would address the nation from the Oval Office on Wednesday instead of appearing on a comedy show came as a welcome surprise to those of us disappointed in the president.
Read more on report from a parallel political universe.
A resurgence of Republican control in Congress is typically good news for the Pentagon. That might not be the case, however, if the tight-fisted tea party has its way.
Read more on military contractors may sing tea-party blues,
The number of people who filed new claims for unemployment benefits fell 21,000 to 434,000 in the latest week, marking the third straight decline and the lowest level since early July, the U.S. Labor Department reported Thursday.
Read more on jobless claims drop 21,000 to 434,000.
The most telling moments of the Buttonwood Gathering — a conference sponsored by The Economist to bring together some of the greatest, and some of the once-powerful, authorities on economics and finance — were predictably unscripted.
Read more on a treat for markets, a trick for the rest of us.
The Federal Reserve next week is expected to announce another round of asset buying to juice the economy and prevent deflation. Investors on Monday showed confidence that the Fed will succeed: For the first time ever, an inflation-protected Treasury note was auctioned with a negative yield—meaning it will have a positive return only if consumer prices rise more than half a percentage point.
Read more on beyond TIPS: ways to play inflation.
The starting pay of certain liberal arts majors generally clocks in well below that of graduates in engineering fields, according to a Wall Street Journal study.
Read more on engineering, computer science pay more than liberal arts.