For those focused on saving for retirement, the recent increase in the defined contribution plan limits are great news. For defined contribution plans like 401(k) and 403(b), the maximum employee deferral has increased by $500 this year to $17,000, (up from $16,500 in 2011). The “catch-up” contribution for participants age 50 and older remains unchanged at $5,500 for tax year 2012.
IRA contribution limits
The annual contribution limits for individual retirement accounts (IRAs) remain unchanged. Individuals age 50 or older before the end of 2012 may contribute up to $6,000 to a traditional or Roth IRA. You can split contributions between a traditional and a Roth IRA, but the combined limit is $6,000. Note that your annual income determines eligibility for a Roth IRA. See irs.gov for additional details.
And don’t forget that there’s still time to make 2011 IRA contributions. You have until April 17, 2012!
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