Articles from The Mediator
Good News on Taxes: 401(k) Limits Increase
401(k) plans are a great way to save for retirement. Most often contributions are tax-deductible, and all earnings roll over tax-free until they are withdrawn — sometimes decades later. So they are a great way to save money for the future as well as save on taxes, or at least to put off paying taxes until well into the future. And some employers match contributions, adding to the benefit.
The IRS is making it easier for most Americans to put away more money for retirement through their 401(k) plans by raising the contribution limits. Starting in 2012 the limit increases to $17,000 per year, which is a $500 increase from 2011, and is the first increase since 2009.
Workers age 50 and over can put in an additional $5,500 per year, which is the same limit as was the case in 2011.
Similar rules apply to 403(b) plans, which are similar plans offered by municipalities and nonprofit groups to their employees.