Dollar Limitations for Pension Plans for 2013
27 November 2012 / Uncategorized / Comments Off on Dollar Limitations for Pension Plans for 2013
The Internal Revenue Service today announced cost-of-living adjustments affecting dollar limitations for pension plans and other retirement-related items for tax year 2013.
Some of the key changes in what truly matters to Widget clients:
- The elective deferral (contribution) limit for employees who participate in 401(k) and 403(b) plans increases from $17,000 to $17,500.
- The catch-up contribution for employees aged 50 and over who participate in 401(k) and 403(b) plans remains at $5,500.
- The limit on annual contributions to an IRA (Traditional or Roth) rises to $5,500, up from $5,000.
- The limitation on the annual benefit under a defined benefit plan increases from $200,000 to $205,000.
- The limitation for defined contribution plans is increased in 2013 from $50,000 to $51,000.
- The annual compensation limit increases from $250,000 to $255,000.
- The limitation for SIMPLE retirement accounts is increased from $11,500 to $12,000.
Obviously this is a very brief summary. The plans discussed above have deadlines to implement and have qualifications that need to be met in order to participate. If we can answer any questions for you, please let us know.