Retirement Account Contribution Limits Rise in 2013

Finance expert Mike Periu on the new contribution amounts set by the IRS for retirement accounts like IRAs and 401(k) plans.
President, Proximo, LLC
December 26, 2012 The Internal Revenue Service announced the annual cost of living adjustments for retirement plan contributions for 2013. Every year the IRS increases the amount you can contribute to retirement accounts to compensate for the ever-rising cost of goods and services to ensure that you are saving enough for retirement:

401(k) plans 
The contribution limit increases to $500 to $17,500. People over 50 can make an additional $5,500 in catch-up contributions. The annual limit for combined employer and employee contributions is $51,000

Traditional IRAs
The maximum annual contribution increases to $5,500 with an additional $1,000 permitted for people over 50.

Roth IRAs
These have the same contribution limits as a traditional IRA except for higher income earners. Single people earning over $112,000 and married people earning over $188,000 can contribute less or nothing to a Roth IRA depending on their actual income level.

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President, Proximo, LLC