IRS announces 2012 retirement plan limits

 

To make it possible for voluntary retirement savings to keep up with inflation, the various numerical limits embedded within qualified retirement plans are indexed for inflation. In October the IRS announced the numbers that will apply in 2012, as shown in the following table:

 

Item

2012 limit

401(k) and 403(b) employee deferral limit

$17,000

457 employee deferral limit (most plans)

$17,000

Catch-up contribution limit

$5,500

Defined contribution dollar limit

$50,000

Defined benefit dollar limit

$200,000

Compensation limit

$250,000

Highly compensated employee income limit

$115,000

Key employee in a top heavy plan

$165,000

 

Catch-up contributions are permitted by those employees who are 50 or older during the calendar year.

 

Saving for retirement is probably never harder than during rocky economy times. Itís those times when it is also most important.

 

(November 2011)

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