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New Rules & Regs for IRAs, Social Security, Medicare & Taxes in 2015 

 

 

Dear Friend,Catherine Head Shot
 

The first few weeks of 2015 have been anything but smooth sailing for the financial markets. In the past few newsletters we had discussed how we can expect to see more volatility in stocks. Well, here it is.

 

Oil prices have plummeted which is a double-edged sword; good for the consumer, but not good for oil stocks or anyone employed by an oil company. Meanwhile the economy continues to grow at a slow pace. The Fed has earmarked mid 2015 as a point to raise rates. But it is quite possible this will not happen given the sluggishness of the economy and inflation running below their 2% target. In addition, the strong dollar hurts companies that do business overseas.

 

Amidst all the gloom, corporate profits will grow in 2015 and many of our companies still have large amounts of cash on the balance sheet. For example, Schlumberger (SLB), an oil service company, has just increased its' dividend 25%, even with oil prices down 50%.  With interest rates still at historically low levels, we believe that it is best for investors to continue to commit money to high quality dividend paying stocks -as long as they do not need to use the money within the next 3 years.

 

Have a great day!


 

Warm regards, 

 Signature

Catherine Maniscalco Avery

 

The backbone of CAIM is to employ a classic long term investment strategy including dividend paying stocks. CAIM is an independent, women owned investment management firm specializing in managing investment portfolios for women and baby boomers.

203.966.2712  p
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January  21, 2015|  Issue No. 58
In This Issue
New Rules & Regs 2015
Holiday Gift Giving 2014
3/4 2014 Review
Quick Links
Find Out More
Call me at 203.966.2712
or visit www.caimllc.com.

 


New Rules & Regs for IRAs, Social Security, Medicare & Taxes in 2015 

                                                                                                                       

Important changes and updates are afoot in the areas of IRAs, Social Security, Medicare and taxes that may affect how you manage your money in 2015.   In "What's in store for 2015: important IRS, Social Security and Medicare updates," Carrie Schwab-Pomerantz, CFP and President of the Charles Schwab Foundation, offers insights on some of these new rules and regulations.   Some may help you save more; some may cost you a bit more. Either way it's wise to be informed.

 

Where You Might Save  

 

IRAs                    

In 2015 there will be higher contribution limit for employer sponsored retirements plan. This means if you have a 401(k) or a 403(b), you can now save a maximum of $18,000 - an increase of $500.   For those 50 and older the maximum catch up contribution has also increased to $6,000.   Which means those 50 or older are now allowed a maximum total contribution of $24,000.00.

In 2015 income limits no longer have to prevent you from opening a Roth IRA. They have been raised to $183,000-$193,000 for married filing jointly (up from $181,000-$191,000) and $116,000-$131,000 for single filers (up from $114,000-$129,000).

And for those who do not have a 401(k), or have put off opening an IRA, the myRA, introduced late last year, is an excellent way to start saving, according to Schwab-Pomerantz.  You can open a myRA with as little as $25, ongoing contributions can be as low as $5, and the money is automatically withheld from your paycheck.

 

Social Security

In 2015 Social Security benefits increase 1.7 percent, which will be reflected in January benefit payments. The monthly maximum benefit at full retirement age has also increased to $2,663.

 

Taxes        

Standard deductions are going up to $6,300 for singles; $12,600 for married filing jointly.

The personal exemption also increases to $4,000, subject to a phase-out that begins with adjusted gross incomes of $258,250 ($309,900 for married filing jointly). It phases out completely at $380,750 ($432,400 for married filing jointly.)

And the estate tax exclusion rises to $5.43 million (from $5.34 million). However, the gift tax exclusion stays at $14,000.

 

Where it Might Cost You

 

Social Security        

The income limit for paying Social Security taxes is now increased from $117,000 to $118,500, which means an additional $1,500 will be subject to the 6.2 percent tax (12.4 percent if you're self-employed).

Further, in 2014 the U.S. tax court limited individuals to just one 60-day IRA rollover per 12 months, no matter how many IRAs they may own. This is a change from days past when people mistakenly thought they could make any number of 60-day rollovers.

 

Medicare

The Medicare Part A deductible is going up 3.6 percent to $1,260 in 2015. Co-insurance payments for hospital stays past 60 days have also gone up, according to the article, another good reason to look into a Medi-Gap policy. Fortunately, the basic premium and deductible for Medicare Part B are unchanged.

 

Taxes

There are also minor adjustments to the Alternative Minimum Tax (AMT) exemption, the Earned Income Tax Credit (EITC), and limits on contributions to flex spending accounts, according to Schwarz-Pomerantz. She advises you look for more complete information at irs.gov.

 

As always if you have any questions, please give us a call at 203.966.2712. We are always on hand to help.

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Holiday Gift Giving 2014

T'is the season for giving and CAIM has always advocated the gift that keeps on giving, namely...  Read more >>
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Third Quarter 2014 Review 

The third quarter began with much talk about the ending of the Quantitative Easing (QE) program, implemented by the Fed to help...  Read more >>  
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