The Internal Revenue Service (IRS) recently published the new rules for contributions into retirement plans and IRAs for 2013. Some of these numbers have increased, and are good for you to know if you participate in IRAs (individual retirement accounts) or retirement plans like 401(k)s, sponsored by employers.

The most an individual can contribute to any kind of IRA, whether it be deductible, non-deductible or a Roth IRA is $5,500 or $6,500 if you are age 50 or older. The amount that you can deduct, or contribute to Roth depends upon if you are eligible to participate in a retirement plan through your employer, and your income. For the current income tables, for IRAs go to http://www.irs.gov/Retirement-Plans/IRA-Deduction-Limits and for Roths go to http://www.irs.gov/Retirement-Plans/Roth-IRAs. This does not cover contributions to spousal IRAs.

Retirement plans

  • 401(k), 403(b), most 457 plans and the federal government’s Thrift Savings Plan, employees contribution increased from $17,000 to $17,500. The catch-up contribution limit for employees aged 50 remains unchanged at $5,500
  • Defined benefit plans commonly referred to as pension plans, maximum benefit increased from $200,000 to $205,000
  • SEP IRA annual contributions the employer makes to an employee’s account can’t exceed the lesser of 25% of compensation, or $51,000 for 2013, up $1,000 from 2012
  • Simple 401k limit is 12,000, up from $11,500 in 2012
  • Total contributions (employer and employee) for 401k and Profit Sharing plans, can’t exceed lessor of participants income or $51,000 (or $56,500 including catch-up contributions), up from $50,000 in 2012
  • There are many other types of retirement plans, the ones listed here are probably the most common types but the information provided doesn’t compare exactly to those other plans, go to the IRS.gov document for other plan limits

Some of these limitations are subject to IRS updates, changes and interpretation and actual plan type and design. Refer to IRS.gov and your plan description for complete information.

 

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