Compliance April 27, 2018

IRS Reverts to Prior HSA Limit for Family Coverage

The $6,900 limitation as the maximum deductible HSA contribution for individuals with family coverage under an HDHP who contribute to an HSA will remain in effect for 2018.

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The Internal Revenue Service (IRS) has issued Revenue Procedure 2018-27 which allows the $6,900 limitation as the maximum deductible health savings account (HSA) contribution for individuals with family coverage under a high-deductible health plan (HDHP) who contribute to an HSA to remain in effect for 2018.

On May 4, 2017, the Department of the Treasury and the IRS released Revenue Procedure 2017-37, which provided that the annual limitation on deductions under section 223(b)(2)(B) for an individual with family coverage under an HDHP was $6,900. Subsequently, statutory amendments by “An Act to Provide for Reconciliation Pursuant to Titles II and V of the Concurrent Resolution on the Budget for Fiscal Year 2018,” enacted December 22, 2017, modified the inflation adjustments for certain provisions of the Internal Revenue Code, including the inflation adjustments under section 223.

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On March 2, 2018, the Treasury Department and the IRS released Rev. Proc. 2018-18, to reflect the statutory amendments to the inflation adjustments under the Act, reducing the annual limitation on deductions under section 223(b)(2)(B) for an individual with family coverage under an HDHP to $6,850 for 2018.

The IRS says it is reversing the change to the limitation because stakeholders informed it that implementing the $50 reduction to the limitation would impose numerous unanticipated administrative and financial burdens. Specifically, stakeholders noted that some individuals with family coverage under an HDHP made the maximum HSA contribution for the 2018 calendar year before the issuance of Rev. Proc. 2018-18, and that many other individuals made annual salary reduction elections for HSA contributions through their employers’ cafeteria plans based on the $6,900 limit. Stakeholders informed the IRS that the costs of modifying the various systems to reflect the reduced maximum, as well as the costs associated with distributing a $50 excess contribution (and earnings), would be significantly greater than any tax benefit associated with an unreduced HSA contribution (and in some instances may exceed $50).
Data & Research April 27, 2018

$1 Million Not the Magic Number Most Employees Say They Need for Retirement

More than half of employees surveyed by CareerBuilder said they think they'll need to save less than $1 million in order to retire.

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More than half (53%) of workers ages 60 and older say they are postponing retirement, with 57% of men putting retirement on hold compared to 48% of women, according to a CareerBuilder survey.

Four in 10 workers don’t think they’ll be able to retire until age 70 or older.

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Approximately one-quarter (24%) do not know how much they will need to save for retirement. Women are much more likely to be unsure of how much to save than men—31% vs. 17%, respectively.

When asked how much money they think they’ll need to save in order to retire, workers said:

  • Less than $500,000: 20%;
  • $500,000 to less than $1 million: 31%;
  • $1 million to less than $2 million: 14%;
  • $2 million to less than $3 million: 5%; and
  • $3 million or more: 7%.

When asked if they are currently contributing to retirement accounts, roughly one in four workers ages 55 and older (23%) said they do not participate in a 401(k), IRA or other retirement plan. Among younger adults ages 18 to 34, 40% said they do not participate in a 401(k), IRA or other retirement plan.

The survey was conducted online within the U.S. by The Harris Poll on behalf of CareerBuilder among 809 employees ages 18 and older (employed full-time, not self-employed, non-government) between November 28 and December 20, 2017.

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