It’s a new year… which means a new set of retirement savings deadlines. So it’s time to do my obligatory beginning-of-the-year nagging.

Think of it as a New Year’s resolution for your 401(k) plan.

If you’re self-employed, you have until April 17 to make your 2017 contribution to your Individual (Solo) 401(k) or SEP IRA. And all taxpayers, whether regular W2 employees or self-employed, have until April 17 to top off their Traditional or Roth IRAs for the 2017 tax year.

But for the rest of us investing in a good, old-fashioned corporate 401(k) plan, January 1 represents the start of a new savings year.

Now is the time to figure out your budget for the year. The IRS raised the contribution limit on 401(k), 403(b) and 457 plans to $18,500, or $24,500 for employees 50 or older.

And remember, these are just the funds you can defer from your annual salary. Any employer matching or profit sharing is additional.

So…

You likely have 26 paychecks this year. If you want to max out your 401(k) plan and take full advantage of the tax break, you’ll want to set aside $712 per paycheck (or $942 if you’re looking to max out $24,500).

That should be doable. But if you feel you can’t realistically get by on a reduced paycheck, you might have some other options. Many companies pay out bonuses in the first quarter. If you think you’ll be getting a bonus, ask your HR department to pay it into your 401(k) plan.

Really make an effort to make these changes this week. The longer you wait, the harder it becomes to meet your savings goals for the year…

Contribution limits for IRAs and Roth IRAs remains unchanged at $5,500 per year, but the eligibility rules have gotten better.

If you or your spouse have access to a 401(k) or other retirement plan at work, you can still deduct a contribution to a Traditional IRA if your income is less than $63,000 (or $101,000 for a married couple filing jointly).

At incomes higher than $63,000 or $101,000, your ability to deduct starts to get phased out until it is eliminated altogether at $73,000 and $121,000, respectively. In 2017, the phase out ranges were $62,000 to $72,000 and $99,000 to $119,000 for single and married taxpayers, respectively.

The rules for Roth IRAs have gotten better, too. In 2018, you can make a full $5,500 Roth IRA contribution if your income is less than $120,000 ($189,000 if married filing jointly).

The amount you can contribute starts to phase out after those amounts and is eliminated completely at $135,000 for single taxpayers and $199,000 for married taxpayers filing jointly.

So, bottom line, the IRS is letting you keep a little more of your money in 2018. But in order to take advantage of it, you’ll probably need to adjust your contribution levels by logging into your plan’s website or letting your boss or human resources contact know.

How Much Is Enough

I wrote a little bit about this recently, but it’s worth reiterating here as we look ahead to 2018.

If you’re a Baby Boomer, it’s very likely that you have retirement on your mind. Even if you love your job and have no immediate plans to stop working, there is a certain peace of mind in knowing you can walk away when the time comes.

If you’ve regularly maxed out your 401(k) plan (or have even gotten close), you may have hundreds of thousands or even a couple million dollars sitting in your account. But with the cost of living what it is these days, can you be sure it’s enough?

Go get a pen and a pad of paper, and let’s do a little exercise. First, write down a realistic figure of what you expect your retirement expenses to be.

The old rule of thumb used by financial planners is that you’ll need an income stream of around 70% to 80% of your pre-retirement income to fund your retirement.

But if you ask me, that number is completely arbitrary.

What if your home mortgage will be paid off by then? What if your current income is artificially lowered by large contributions to your 401(k)? What if you intend to move to a lower-cost area once retired?

A better way to do this is to take an average of your credit card bills, utilities and other identifiable expenses over the past couple of years.

If you expect that your house will be paid for by the time you retire, you can subtract your mortgage payment from the calculation, but be sure to leave an allowance for property taxes and insurance. Even once the mortgage is paid off, you never really “own” your house.

Once you have that estimate, pad it by at least another 20% to 25%. You likely forgot a few expenses, and it’s better to give yourself a little wiggle room.

Now that you have an estimate for your annual expenses, subtract any guaranteed payments, such as Social Security, a fixed annuity or a private defined-benefit pension plan.

So let’s say you estimate your expenses will be $100,000 per year in retirement and that Social Security and a pension from an old job will cover $40,000. Your retirement savings will need to cover the remaining $60,000. Assuming a 4% withdrawal rate, you’d need a nest egg of $1.5 million ($60,000 / 4% = $1.5 million). And to play it safe, I would want my nest egg to be at least 20% higher than what this estimate would suggest to allow for the possibility of a bear market.

Do the math for yourself. If your retirement savings make the cut, congratulations. You can retire stress-free.

But if your nest egg is falling short, you might need to rethink a few things. Perhaps you’ll need to work longer or downsize your home.