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 2014, as shown in the following table:
|401(k) and 403(b) employee deferral limit||$17,500|
|457 employee deferral limit (most plans)||$17,500|
|Catch-up contribution limit||$5,500|
|Defined contribution dollar limit||$52,000|
|Defined benefit dollar limit||$210,000|
|Highly compensated employee income limit||$115,000|
|Key employee in a top-heavy plan||$170,000|
Catch-up contributions are permitted by those employees who are 50 years of age or older during the calendar year.
Saving for retirement is probably never harder than during rocky economy times. It’s those times when it is also most important.
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