In 2013, the contribution limit for 401(k), 403(b), most 457 plans and the federal government’s Thrift Savings Plan is increased from $17,000 to $17,500. The catch-up contribution limit, for those ages 50 and up, remains at $5,500.
Also, the contribution limit for traditional and Roth IRAs is increased from $5,000 to $5,500. The catch-up contribution limit is unchanged at $1,000. Taxpayers should note that this limit applies to combined contributions to all IRAs (maximum $5,500 contribution across all IRAs, not every IRA).
Contribution limitations were raised because “the increase in the cost-of-living index met the statutory thresholds that trigger their adjustments,” the IRS said in an official notice.
In addition to being able to save more, eligibility requirements for IRAs have also eased slightly. The IRS reduces the amount that taxpayers can contribute to traditional and Roth IRAs when their incomes reach a certain range — at a certain income level, taxpayers cannot contribute at all.
For traditional IRAs:
- Singles and heads of household, covered by workplace retirement plan: $59,000 to $69,000
- Married filing jointly, covered by workplace retirement plan: $95,000 to $115,000
- Married, not covered by workplace retirement plan: $178,000 to $188,000
For Roth IRAs:
- Singles and heads of household: $112,000 to $127,000
- Married: $178,000 to $188,000
Category: News & Trends