Did you know the dollar limits for some defined contribution and defined benefit retirement plans were raised for the 2013 tax year? The Internal Revenue Service announced cost-of-living adjustments, or COLAs, applicable to some of the retirement plans available to you and your employees.
The elective deferral limit for 401(k), 403(b) and most 457 plans increased from $17,000 to $17,500. However, the “catch-up” contribution limit for those age 50 and older remained at $5,500, unchanged from the 2012 to 2013 tax year.
Other, less prominent retirement plan types received various adjustments as well. SIMPLE (savings incentive match plan for employees of small employers) received a contribution limit increase from $11,500 to $12,000. For simplified employee pensions (SEPs) the minimum compensation amount remains the same at $550 but the maximum compensation limit increased from $250,000 to $255,000.
The information contained within this blog post is for informational purposes only and does not constitute financial guidance or advice. For more information and guidance regarding the various types of retirement plans available to you and your employees and other changes made by the IRS applicable to the 2013 tax year, please seek the services of a registered financial adviser and tax professional.