2012 Contribution Limits

December 13th, 2011

by Shelley Seagler

As we all know, or at least should know, saving is a crucial piece of financial success.  In tax qualified accounts, the amount you can save each year is dictated by federal tax laws. In 2012, the $5,000 contribution limit remains the same as 2011 for Traditional and Roth IRAs. However, the 2012 limits have increased for 401(k)s, 403(b)s, and SEP IRAs.   If you are doing any final planning for 2011, check out “Time to start Year-End Planning.

If you will be 50 or older by the end of 2012, you have the benefit of being able to make “catch up” contributions.  In Traditional and Roth IRAs, you can contribute an additional $1,000.   In a 401(k) or 403(b), you can contribute an additional $5,500 and you can contribute $2,500 extra to a SIMPLE IRA.  SEP IRAs do not allow for catch up contributions.

Here are the 2012 contribution limits for the different types of retirement accounts:

If you’re not sure which investments to choose in your employer-sponsored retirement plan, check out our free 401(k) course.  The course includes 9 modules that will help you understand the details of your plan, an Excel workbook that guides you through selecting the appropriate assets, and steps to evaluate and maximize your portfolio each year.

You may also want to check out our previous articles, What to do with your 401(k) or 403(b) if you leave your job  and Can I Roll a 401(k) Directly to a Roth?

This is not financial, legal or tax advice. Our goal is your financial success, but all investments involve risk including the possible loss of principal and results will vary. If you are interested in the Snider Investment Method, please read the Owner's Manual for a complete discussion of risks and benefits. More information can be found on our website or by calling 1-888-6SNIDER. Past performance is not indicative of future results.

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