Each year the IRS publishes updated IRA contribution limits, as well as catch-up contribution limits for the new year. Typically, the limits the IRS sets each year is based on inflation factors (with minimum $500 increases), so they do not necessarily increase the limit each year.
The IRA Contribution Limit for 2014 has not been set yet. But for 2013, however, the IRA contribution limit has been increased.
The limit on IRA contributions applies to both deductible and non-deductible Traditional IRA’s, as well as Roth IRA’s. You may contribute to either type (if you qualify), but you are still subject to the same total aggregate contribution limit.
2014 Social Security Inflation Adjustment
401K Contribution Limits 2014
Don’t Buy-and-Forget the Investments in Your 401K Plan
Recent History of IRA Contribution Limits:
As you can see, the IRA contribution limits do not rise dramatically each year. Although over time, if investors are diligent about increasing their contributions, it can certainly make a difference.
2014 – $5,500 + possible index for inflation ($500 minimum increase)
2013 – $5,500
2012 – $5,000
2011 – $5,000
2010 – $5,000
2009 – $5,000
2008 – $5,000
Over Age-50 Catch Up IRA Contribution Limits
For those of you that are over age 50 (or turn age 50 before the end of the year), you are allowed an additional IRA “catch-up” contribution. These limits have not adjusted for inflation, but may at some point in the future:
2014 – $1,000
2013 – $1,000
2012 – $1,000
2011 – $1,000
2010 – $1,000
2009 – $1,000
2008 – $1,000
IRA Deduction Limits
Roth IRA contributions are not tax deductible.
Your deduction is allowed in full if you (and your spouse, if you are married) aren’t covered by a retirement plan at work.
If you ARE covered by a retirement plan at work, you can see the income limitations at the IRS website by going here.
Robert Henderson is the President of Lansdowne Wealth Management, an independent, fee-only advisory firm in Mystic, CT. His firm specializes in financial planning and investment management for retirement, with a special focus on the particular needs of women that are divorced or widowed. He is an Accredited Asset Management Specialist and a Certified Divorce Financial Analyst. Mr. Henderson can be reached at 860-245-5078 or email@example.com. You can also view his personal finance blog,The Retirement Workshop at http://lwmwealth.com/blog and the firm’s website at http://www.lwmwealth.com.
If you are an employee or retiree of General Dynamics, Pfizer, or L&M Hospital, and you would like advice and direction on managing your Fidelity 401K or Hewitt 401K plan, please sign up for our monthly newsletter, which provides complimentary ongoing advice, commentary, and model portfolios for each of those plans. You can sign up automatically at Your 401K http://www.lwmwealth.com/services/your401k.html.
See my Google+ Profile