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The 2013 retirement account contribution limits and income restrictions are as follows:

  • The contribution limit on employer-sponsored plans (401(k), 403(b) and most 457 plans) is $17,500.
  • The contribution limit on traditional and Roth IRAs is $5,500.
  • The “catch-up” contribution for people ages 50 and older is $1,000 for IRAs and $5,500 for 401(k)s and employer-sponsored plans.
  • You can contribute to a Roth IRA if your adjusted gross income is less than $112,000 filing alone, and $178,000 if you’re married filing jointly.
  • With the traditional IRA, your ability to deduct your contribution on this year’s taxes will start to be phased out when your income is above $59,000 if you are single and $95,000 if you are married filing jointly—if you’re also covered under an employer plan at work. If your company doesn’t offer a plan, you may be able to deduct the entire contribution, regardless of your income.

Because retirement accounts are meant to be saved long-term and are taxed accordingly, early withdrawals are always subject to fees. For this reason, taking money out of your retirement account is a cardinal personal finance sin, with few exceptions.

Many people don’t understand the rules before they start.

Basic things like which retirement account you can open and how much you can contribute carry costly penalties for misunderstanding. So as you get started (or as you re-balance), make sure you know the rules. I can help you navigate your retirement planning strategy so as to keep your money safe!

Free consultation: (866) 471 7233