In October, the IRS announced the cost-of-living adjustments to dollar limitations for 2013 retirement plans. Xenium partner, Principal, provided us with a year over year comparison of the limits taking effect January 1, 2013.
| Limit | 2012 | 2013 |
| Compensation Limit | $250,000 | $255,000 |
| Defined Contribution §415 Limit | $50,000 | $51,000 |
| Defined Benefit §415 Limit | $200,000 | $205,000 |
| Key Employee Officer | $165,000 | $165,000 |
| Highly Compensated Employee | $115,000 | $115,000 |
| Governmental Plan Compensation Limit | $375,000 | $380,000 |
| ESOP §409(o) Limits | $1,015,000 | $1,035,000 |
| $200,000 | $205,000 |
Elective deferral contributions also increased slightly in a few areas. Below is a table outlining the year over year changes.
| Limit | 2012 | 2013 |
| 401(k), 403(b), 457(b) Plan Deferral Limit | $17,000 | $17,500 |
| 401(k), 403(b), governmental 457(b) Catch-up Limit | $ 5,500 | $ 5,500 |
| Simple Plan Deferral Limit | $11,500 | $12,000 |
| Simple Plan Catch-up Limit | $ 2,500 | $ 2,500 |
Other noteworthy changes:
– Traditional and Roth IRAs increase from $5,000 to $5,500. IRA catch-up contributions (contributions for individuals age 50 and over) remains at $1,000.
– The taxable wage base for Social Security is rising from $110,000 to $113,700 in 2013.
Sources:
http://www.principal.com
http://www.irs.gov/uac/2013-Pension-Plan-Limitations