Each year the IRS reviews the dollar limits for retirement plans and makes adjustments for inflation, the so-called cost-of-living adjustment (COLA). Workers will be able to defer taxes on an additional $500 in their 401(k) and IRA plans in 2013.
401(k) Contribution Limit - The contribution limit for 401(k) plans has increased from $17,000 in 2012 to $17,500 in 2013. The catch-up contribution for participants age 50 and over is unchanged at $5,500.
IRA Contribution Limits - IRA contribution limit has increased from $5,000 in 2012 to $5,500 in 2013. The catch-up contribution remains unchanged at $1,000. The new contribution limits apply to both Traditional and Roth IRAs.
New 401(k) Fee Disclosures - This is the first full year that 401(k) participants will receive quarterly and annual 401(k) statements listing the fees charged to their accounts and detailing the returns of their investments compared to the investment’s relevant benchmark. These new rules went into effect in 2012 and will give participants a clearer picture of their 401(k).
Please contact WG’s Abhay Kothari at (949) 885-2361 if you have questions or are interested in a retirement plan for your business. Sign up here to receive Western Growers Financial Services’ weekly e-news update on the week’s market performance.
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