Internal Revenue Service has announced the following limitations for 2012 retirement plans:
IRA account – 100% of earned income up to $5,000; age 50 and older catch up $1,000
SIMPLE – 100% of earned income up to $11,500; age 50 and older catch up $2,500
401(k) – $17,000; age 50 and older catch up $5,500
457 Plan – $17,000; age 50 and older catch up $5,500
Defined Contribution Plan
The maximum annual contribution for a plan year ending in 2012 is the lesser of 100% of compensation or $50,000. If a 401(k) contribution is used, those age 50 and older may reach $55,500.
Defined Benefit Plan
The maximum annual benefit for plan years ending in 2012 is the lesser of 100% of average annual compensation, or $200,000.
Compensation to be used for retirement plan purposes for plan years beginning in 2012 is $250,000.
A highly compensated employee is one earning $115,000 or more for plan years beginning in 2012. The social security taxable wage base is $110,100.
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