The IRS recently published the new contribution limits for various retirement plans for 2013. These limits are indexed to inflation, and as such sometimes they do not increase much year over year, and sometimes they don’t increase at all.
This year we saw across-the-board increases for most all contribution amounts, and as usual the income limits increased as well. This provides increased opportunity for savings via these tax-preferred vehicles.
IRAs
The annual contribution limit for IRAs (both traditional and Roth) increased from $5,000 in 2012 to $5,500 in 2013. The “catch up” amount, for folks age 50 or over, remains at $1,000.
The income limits for traditional (deductible) IRAs increased slightly from last year: for singles covered by a retirement plan, your Adjusted Gross Income (AGI) must be less than $59,000 for a full deduction; phased deduction is allowed up to an AGI of $69,000. This is an increase of $1,000 over the limits for last year. For married folks filing jointly who are covered by a retirement plan by his or her employer, the AGI limit is increased to $95,000, phased out at $115,000, which is a $3,000 increase over last year’s limits. For married folks filing jointly who are not covered by a workplace retirement plan but are married to someone who is covered, the AGI limit for deduction is $178,000, phased out at $188,000; this is an increase of $5,000 over 2012’s limits.
The income limits for Roth IRA contributions also increased: single folks with an AGI less than $112,000 can make a full contribution, and this is phased out up to an AGI of $127,000. For married folks filing jointly, the AGI limits are $178,000 to $188,000 for Roth contributions, up by $5,000 over 2012.
401(k), 403(b), 457 and SARSEP plans
For the traditional employer-based retirement plans, the amount of deferred income allowed has increased as well. For 2013, employees are allowed to defer up to $17,500 (up from $17,000) with a catch up amount of $5,500 for those over age 50 (unchanged from 2012). If you happen to work for a governmental agency that offers a 457 plan in addition to a 401(k) or 403(b) plan, you can double up and defer as much as $35,000 plus catch-ups.
The limits for contributions to Roth 401(k) and Roth 403(b) are the same as traditional plans – the limit is for all plans of that type in total. You are allowed to contribute up to the limit for either a Roth plan or a traditional plan, or a combination of the two.
SIMPLE
Savings Incentive Match Plans for Employees (SIMPLE) deferral limits also increased, from $11,500 to $12,000 for 2013. The catch up amount remains the same as 2012 at $2,500, for folks at or older than age 50.
Saver’s Credit
The income limits for receiving the Saver’s Credit for contributing to a retirement plan increased for 2013. The AGI limit for married filing jointly increased from $57,500 to $59,000; for singles the new limit is $29,500 (up from $28,750); and for heads of household, the AGI limit is $44,250, an increase from $43,125. The saver’s credit rewards low and moderate income taxpayers who are working hard and need more help saving for retirement. The table below provides more details on how the saver’s credit works:
| Amount of Credit | Married Filing Jointly | Head of Household | Single/Others |
|---|---|---|---|
| 50% of first $2,000 deferred | $0 to $35,500 | $0 to $26,625 | $0 to $17,750 |
| 20% of first $2,000 deferred | $35,501 to $38,500 | $26,626 to $28,875 | $17,751 to $19,250 |
| 10% of first $2,000 deferred | $38,501 to $55,500 | $28,876 to $44,250 | $19,251 to $29,500 |
Sterling Raskie, MSFS, CFP®, ChFC®
The latest in our Owner’s Manual series, A 401(k) Owner’s Manual, was published in January 2020 and is available on 
A Medicare Owner’s Manual, is updated with 2020 facts and figures. This manual is available on 
Social Security for the Suddenly Single can be found on Amazon at 
Sterling’s first book, Lose Weight Save Money, can be 
An IRA Owner’s Manual, 2nd Edition is available for purchase on Amazon. Click the link to choose the 
Jim’s book – A Social Security Owner’s Manual, is now available on Amazon. Click this link for the 
And if you’ve come here to learn about queuing waterfowl, I apologize for the confusion. You may want to discuss your question with Lester, my loyal watchduck and self-proclaimed “advisor’s advisor”.