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Key Retirement Plan Numbers


Retirement Planning Key Numbers

Certain retirement plan and IRA limits are indexed for inflation each year, and many of the limits eligible for a cost-of-living adjustment (COLA) have increased for 2013. Some of the key numbers for 2013 are listed below, with the corresponding limit for 2012. (The source for these 2013 numbers is IRS Information Release IR-2012-77.)

 

Elective deferral limits

20122013
401(k) plans, 403(b) plans, 457(b) plans, and SAR-SEPs1 (includes Roth contributions) Lesser of $17,000 or 100% of participant's compensation ($22,500 if age 50 or older)2 Lesser of $17,500 or 100% of participant's compensation ($23,000 if age 50 or older)2
SIMPLE 401(k) plans and SIMPLE IRA plans1 Lesser of $11,500 or 100% of participant's compensation ($14,000 if age 50 or older) Lesser of $12,000 or 100% of participant's compensation ($14,500 if age 50 or older)
 

IRA contribution limits

20122013
Traditional and Roth IRAs Lesser of $5,000 or 100% of earned income ($6,000 if age 50 or older) Lesser of $5,500 or 100% of earned income ($6,500 if age 50 or older)
 

Defined benefit plan annual benefit limits

20122013
Annual benefit limit per participant Lesser of $200,000 or 100% of average compensation for highest three consecutive years Lesser of $205,000 or 100% of average compensation for highest three consecutive years
 

Defined contribution plan limits (qualified plans, 403(b) plans, and SEP plans)

20122013
Annual addition limit per participant (employer contributions; employee pretax, after-tax, and Roth contributions; and forfeitures) Lesser of $50,000 or 100% (25% for SEP) of participant's compensation Lesser of $51,000 or 100% (25% for SEP) of participant's compensation

1 Must aggregate employee deferrals to all 401(k), 403(b), SAR-SEP, and SIMPLE plans of all employers; 457(b) contributions are not aggregated. For SAR-SEPs, the percentage limit is 25% of compensation reduced by elective deferrals (effectively a 20% maximum contribution).

2 Special catch-up limits may also apply to 403(b) and 457(b) plan participants.

Retirement plan compensation limits20122013
Maximum compensation per participant that can be used to calculate tax-deductible employer contribution (qualified plans/SEPs)

$250,000

$255,000

Compensation threshold used to determine a highly compensated employee

$115,000 (when 2012 is the look-back year)

$115,000 (when 2013 is the look-back year)

Compensation threshold used to determine a key employee in a top-heavy plan

$1 for more-than-5% owners

$165,000 for officers

$150,000 for more-than-1% owners

$1 for more-than-5% owners

$165,000 for officers

$150,000 for more-than-1% owners

Compensation threshold used to determine a qualifying employee under a SIMPLE plan

$5,000

$5,000

Compensation threshold used to determine a qualifying employee under a SEP plan

$550

$550

 Income phaseout range for determining deductibility of traditional IRA contributions for taxpayers:20122013

1. Covered by an employer-sponsored plan and filing as:

 

 

  Single/Head of household

$58,000 - $68,000

$59,000 - $69,000

  Married filing jointly

$92,000 - $112,000

$95,000 - $115,000

  Married filing separately

$0 - $10,000

$0 - $10,000

2. Not covered by an employer-sponsored retirement plan, but filing joint return with a spouse who is covered by a plan

$173,000 - $183,000

$178,000 - $188,000

Income phaseout range for determining ability to fund a Roth IRA for taxpayers filing as:20122013
 

  Single/Head of household

$110,000 - $125,000

$112,000 - $127,000

  Married filing jointly

$173,000 - $183,000

$178,000 - $188,000

  Married filing separately

$0 - $10,000

$0 - $10,000

                                          
Dorchester Advisors is a Registered Investment Advisor in NJ and NY.

Prepared by Broadridge Investor Communication Solutions, Inc. Copyright 2013.

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