Contribution Limits to Retirement Plans Rise in 2012

The elective deferral limit for employee contributions to 401(k) and similar plans will be $17,000, or $500 more than the limit for 2011. Those who are at least age 50 by the end of the year can add another $5,500; this amount is unchanged from 2011. However, the elective deferral limit for Savings Incentive Match Plans for Employees (SIMPLEs) will remain unchanged at $11,500, with a $2,500 additional amount for those who are age 50 by year-end.

The contribution limit for profit-sharing plans and simplified employee pension plans (SEPs) will rise to $50,000 (up from $49,000 in 2011). The benefit limit under a defined benefit (pension) plan will be $200,0000 (up from $195,000 in 2011). The maximum amount of compensation taken into account in determining contributions and benefits will rise to $250,000 (up from $245,000 in 2011).

Source: IR-2011-103