IRS Raises 401(k) and Pension Plan Limits!

The IRS announced that the 401(k) limits for contribution will be raised in 2013 due to the cost of living expenses rising. Curious to see the changes? Here is the IRS news release with information. Essentially, the changes are:

• Maximum elective deferral by employee raises from $17,000 to $17,500
• Catch up contribution (ages 50 and older for 2012) stays at $5,500
• Defined contribution maximum deferral for the combined amount of employee and employer raises from $50,000 to $51,000
• Employee annual compensation limit for calculating contributions raises from $250,000 to $255,000
• Annual compensation of key employees in a top-heavy plan stays at $165,000
• Annual compensation of highly compensated employee in a top-heavy plan stays at $115,000