Key Financial Planning Updates for 2015

January 7, 2015

As we begin the New Year, there are some important financial planning changes that you should be aware of; especially as many of you are currently making decisions that will affect your 2015 benefits. I believe the following changes are important to pay attention to and have identified those most likely to affect you:

  • The limit on employee contributions to a 401(k) plan have increased to $18,000, up $500 from 2014’s cap. Also, the “catch-up” for those age 50 and over has also been increased, allowing for an additional $6,000 in contributions instead of the $5,500 cap previously. These new contribution levels also apply to 403b accounts and most 457 plans as well. You’ll want to update your elections accordingly if you plan to max out your contributions.
  • The annual limit on employee contributions to flexible spending accounts is now $2,550 for qualified health care expenses. This is up $50 from 2014, so please ensure you update your election for this new maximum amount if you plan to utilize a health care FSA. Additionally, HSA annual contribution limits have slightly increased to $3,350 for individuals and $6,650 for families.
  • The standard deduction rises to $6,300 for single filers and $12,600 for married taxpayers filing jointly in 2015. That’s up $100 and $200, respectively, from 2014 figures. The limitation for itemized deductions to be claimed on tax year 2015 returns of individuals begins with incomes of $258,250 or more ($309,900 for married couples filing jointly). The personal exemption for tax year 2015 rises to $4,000, up from the 2014 exemption of $3,950. However, the exemption is subject to a phase-out that begins with adjusted gross incomes of $258,250 ($309,900 for married couples filing jointly) and phases out completely at $380,750 ($432,400 for married couples filing jointly.)
  • The 2015 cost of living adjustment of 1.7% for federal pensions, social security and disability payments will take affect starting January 1st.
  • You are allowed to receive a distribution from an IRA and roll the funds over to another IRA, or the same IRA, within 60 days to avoid any taxation issues. Previously, the IRS’s position was that this rule applied to each IRA. Per the recent Babrow v. Commissioner tax court decision, the 12-month one rollover limitation now applies to all IRAs, thus, only one 60-day rollover is allowed per 12-month period regardless of how many IRAs an individual owns.
  • Qualified retirement accounts, such as 401k’s, pensions, and IRAs have good creditor protections. However, in 2014 the Supreme Court reduced the protections afforded to some IRAs. Per the recent U.S. Supreme Court case: Clark v. Rameker, Inherited IRAs are no longer considered “retirement funds.” Thus, Inherited IRAs will no longer receive creditor protections.

The changes described above do not include all of the 2015 changes in their entirety, however, these are most likely to affect you. Thus, expect to learn more about these changes in detail as you meet with your trusted advisor.

With planning, HFG Wealth Management can help make sure you are prepared for many of life’s challenges.  At HFG Wealth Management, we embrace a more holistic method of financial planning known as Financial Life Planning™. We believe this is a financially effective and personally rewarding approach to creating a practical, lasting financial plan.  As financial professionals using the life planning approach, our purpose is to assist individuals and families in creating a long-term vision that is consistent with their core values. At HFG we recognize that life events and life transitions can impact your financial responsibilities and your vision of the future. We are here to provide you with tips and strategies to get you started and help you reach your financial and life goals at every stage.  For more information, please visit or call 832.585.0110



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