Thanks, IRS! Boosts to IRA and 401k Limits in 2013
The IRS has made it a little easier to grow your retirement nest egg for the golden years. On October 18th the IRS announced that contribution limits for IRAs and 401(k) plans would be increasing in response to inflation.
In 2012, as much as $5,000 can be placed in an IRA and up to $17,000 in a 401(k) account.
In 2013, these amounts will increase $500 for both types of accounts.
However, the additional amounts that those over age 50 are allowed to contribute will remain unchanged;
those over age 50 can contribute an extra $1,000 to IRAs and $5,500 to 401(k)s.
These increases are inflation adjustments designed to let retirement savings keep up with rising living costs. Inflation has been minimal in recent years, making this is the first contribution limit increase since 2008 for IRAs. For 401(k)s, this is the second annual increase: limits stayed at $16,500 from 2009 to 2011 before they rose by $500 this year.