Brendan Willmann, CPA, EA, CFP®
Asheville: 828-348-8698
Cincinnati: 513-549-2736

401(k) Contribution Limit for 2013

The 401(k) contribution limit will increase to $17,500 for 2013.

No change has been made to the “catch-up provision” for plan participants age 50 and older.  They will still be able to contribute an additional $5,500 for a total of $23,000.

As with the IRA contribution limit, this is an aggregate participant contribution limit meaning that contributions can be made to both a Traditional and Roth 401(k) but the combined employee contribution cannot exceed $17,500 or $23,000.

Plan participants frequently ask if the $17,500 or $23,000 limit includes contributions made by the employer.  It does not.  The limit of total contributions to an account is governed by a separate limit which will increase to $51,000 in 2013.

http://www.irs.gov/uac/2013-Pension-Plan-Limitations

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