The Internal Revenue Service (IRS) announced cost of living adjustments affecting dollar limitations for pension plans and other retirement-related items for Tax Year 2013. 

In general, many of the pension plan limitations will change for 2013 because the increase in the cost-of-living index met the statutory thresholds that trigger their adjustment.  However, other limitations will remain unchanged because the increase in the index did not meet the statutory thresholds that trigger their adjustment.

The IRS adjustments make changes to:

• The elective deferral (contribution) limit for employees who participate in 401(k), 403(b), most 457 plans, and the federal government’s Thrift Savings Plan
• The catch-up contribution limit for employees aged 50 and over who participate in 401(k), 403(b), most 457 plans, and the federal government’s Thrift Savings Plan
• The deduction for taxpayers making contributions to a traditional IRA
• The AGI phase-out range for taxpayers making contributions to a Roth IRA
• The AGI limit for the saver’s credit (also known as the retirement savings contribution credit) for low- and moderate-income workers

For more information, visit the IRS website.

Author: Gail Cecchettini Whaley

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