2013 Pension Plan and Retirement Changes

The IRS announced today cost of living adjustments for dollar limitations for pension plans and retirement related items for 2013. Highlights for the most common plans include:

Elective deferrals for 401(k), 403(b), most 457 plans and the Federal Thrift Savings Plan is increased to $17,500. Catch-up contributions for age 50 and over remain unchanged at $5,500.

Traditional IRA contribution deductions for those covered by an employer retirement plan are phased out for singles and heads of household with modified adjusted gross income between $59,000 and $69,000; married couples filing jointly income phase out range is $95,000 to $115,000; Contributors not covered by an employer retirement plan and married to someone who is, has a phase out based on the couple’s income between $178,000 and $188,000.

Contributions to a Roth IRA has a phase out range for married couples of $178,000 to $188,000; singles and heads of household income phase out range is $112,000 to $127,000.

The Saver’s credit for low and moderate income workers AGI limit is $59,000 for married couples, $44,250 for heads of household and $29,500 for singles or married filing separately.

The limitation on the annual benefit under a defined benefit plan is increased to $205,000.

The limitation for defined contribution plans is increased to $51,000.

The limitation regarding SIMPLE retirement accounts is increased to $12,000.

For the complete announcement covering all retirement plan changes, visit IRS.gov for Newswire release IR-2012-77.

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