By Sophia Bera
NEW YORK (AdviceIQ) -- Did you contribute all money allowed to your individual retirement accounts last year? Probably not. Here's how to make up for that and save better in 2014.
First, which account to bulk up: your 401(k) or Roth IRA? Contribution limits didn't change this year for Roth IRAs, 401(k)s, 403(b)s for employees of public schools and certain tax-exempt organizations or for savings incentive match plan for employees' IRAs for employers and the self-employed.
The limit did change for simplified employment pension IRAs, for which employers can take tax deductions for discretionary contributions.
Here's the breakdown by account type:Hitting Roth maximums. If you contribute monthly to your Roth IRA and want to hit the $5,500 max ($6,500 if you're 50 or older), start the year by kicking in $458.33 each time ($542 if 50 or older) or round to $450 a month and throw in an extra $100 sometime during the year. To contribute to your Roth with each paycheck and aim for the max, the amount comes to $229.16 if you're paid twice a month or $211.53 if paid every other week. Again, you end up a few cents from the max, so adjust your last contribution of the year to make up the difference. recent changes to the phase-out range. If your job offers a plan, your tax deduction for traditional IRA contributions phases out if your modified adjusted gross income or how much you make before subtracting deductions falls between $60,000 and $70,000 ($96,000 to $116,000 for couples). If only one spouse has a retirement plan at a workplace, the deduction phases out once the couple's income reaches $181,000 to $191,000. Topping off 401(k) and 403(b) plans. You likely contribute a percentage of your salary to 401(k)s or 403(b)s. If you want to reach the maximum contribution of $17,500 by 2014's end, best to contribute a specific dollar amount per paycheck. If you are paid twice a month (24 paychecks per year), contribute $729.17 per paycheck to hit the max, $673.08 per paycheck if paid every other week (26 paychecks per year). If you're paid monthly, contribute $1,458.33 per check. Reaching SIMPLE and SEP IRA maximums. If you're paid twice a month, contribute $500 per paycheck to hit the max of $12,000 for a SIMPLE IRA, $461.54 if paid every other week and $1,000 per check if you're paid monthly.
- Married filing jointly: Less than $60,000.
- Head of household: Less than $45,000.
- Single: Less than $30,000.