News & Views
Fiscal Cliff Edition |
Greetings!
I hope all is well. In this edition of News & Views, I discuss the "fiscal cliff" and 2013 retirement plan limits. As always, please contact me with any questions or suggestions you may have.
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| Fiscal Cliff | |
What Does It All Mean?
It's December 31, 2012, and the man-made fiscal cliff is upon us. What will Congress do? Will a compromise be reached or will everyone see their taxes rise and automatic spending cuts enacted? And what about the debt ceiling - we're about to breach that again too.
Here's what I know. The federal government has spent $5.3 trillion more than it has taken in through tax revenue over the past four years. By any measure, spending is at its highest level in our nation's history except for the period during World War II (1942-45).
The economic recovery we've experienced over the past few years has come at a steep price. On average, the federal government has taken in $2.26 trillion and spent $3.59 trillion per year each of the last four years. If one boils that down to what a household might experience, that would equate to an average income of $112,997 and average expenses of $179,656 per year. How long can that last? How would you solve the household deficit problem? Work more hours (raise taxes)? Cut spending? Buy some lottery tickets?
The most likely outcome is a temporary fix to kick the can down the road just a little further. At some point, a more meaningful long-term solution is needed. I just don't think our leaders are ready for that now.
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| 2013 Retirement Plan Contribution Limits | |
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Traditional / ROTH IRA
$5,500 standard contribution limit with a $1,000 catch-up contribution for participants age 50 and above
401(k) / 403(b)
$17,500 standard pre-tax contribution limit with a $5,500 catch-up contribution for participants age 50 and above
SIMPLE
$12,000 standard pre-tax contribution limit with a $2,500 catch-up contribution for participants age 50 and above
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| Happy New Year! | |
Thank you for the trust and confidence you place in me. I wish you and your family the best during 2013!
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Sincerely,
Paul Hewitt
(949) 727-4734 x1 |
