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Retirement Basics
Contribution Limits
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As it might be expected, there are limits on how much can be contributed to
the various types of retirement plans. The IRS defines these limits and often will
adjust them for inflation over time.
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401(k), 403(b), and 457 Contribution Limits:
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Year
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Age 49 & Under
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Age 50 & Over
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2013
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$17,500
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$23,000
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2014
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$17,500
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$23,000
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SIMPLE IRA Contribution Limits:
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Year
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Age 49 & Under
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Age 50 & Over
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2013
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$12,000
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$14,500
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2014
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$12,000
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$14,500
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IRA & Roth IRA Contribution Limits:
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Year
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Age 49 & Under
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Age 50 & Over
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2013
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$5,500
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$6,500
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2014
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$5,500
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$6,500
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Roth IRA Income Range:
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Year
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Single
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Married Filing Joint
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2013
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$112,000-$127,000
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$178,000-$188,000
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2014
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$114,000-$129,000
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$181,000-$191,000
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*Removal Of Roth Conversion Limit for 2010 and beyond.
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Defined Contribution Plan/SEP IRA Limits:
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Year
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Max Dollar Contributed
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Max Compensation Considered
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2013
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$51,000
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$255,000
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2014
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$52,000
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$260,000
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*Maximum amount contributed to a defined contribution plan is 25% of an employee's
compensation, capped at the max listed above.
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401(k) Catch-up
A 401(k) catch-up contribution is any elective deferral made by an eligible participant
that is in excess of the statutory limit of $17,500 in a given year. The 2014 401(k)
catch-up maximum is $5,500 per year and will continue to be indexed for inflation
in upcoming years. Although to be eligible for a 401(k) catch-up contribution there
are a few stipulations. First, you must be or be turning 50 years of age during
the calendar year and second you must reach at least one of the following limits
before catch-up contributions can begin:
a. Annual deferral limit
b. Plans deferral limit
c. Annual ADP limit for highly compensated employees.
According to the Profit Sharing & 401(k) Council of America, 98% of all employer sponsored
retirement plans permit catch-up contributions, but only 31% of employers match
401(k) catch-up contributions.
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