Contribution limits to 401(k) to go up

October 24, 2011|Eileen Ambrose

When the federal government recently raised the benefits for Social Security recipients, it also lifted the amount of money you can salt away in tax-friendly retirement accounts.

Beginning next year, you can put away up to $17,000 — $500 more — in a 401(k), 403 (b) and most 457 plans. Catch-up contributions for workers 50 and up, though, remain at $5,500 a year.

Workers, covered by a retirement plan on the job, can make a full or partial tax-deductible contribution to a traditional IRA if their adjusted gross income doesn’t exceed $68,000 for singles and $112,000 for joint filers. This income limit was raised by a couple thousand dollars.

Also, the income limit for workers eligible for A Roth IRA has also gone up a few thousand dollars. A full or partial contribution can be made by singles with adjusted gross income of up to $125,000 and joint filers making up to $183,000.

With workers needing to set aside every penny they can for retirement, these small adjustments can help.

 

  

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