Author Topic: 2013 IRA and 401(k) contribution amounts increased  (Read 4630 times)

DocCyane

  • Bristles
  • ***
  • Posts: 389
  • Location: USA
  • Keep going. You're doing just fine.
2013 IRA and 401(k) contribution amounts increased
« on: October 22, 2012, 06:48:26 AM »
IRA contributions for 2013 increase to $5500. $6500 if you're over 50. 401(k) goes up too.

http://www.dailyfinance.com/2012/10/22/irs-gives-your-retirement-saving-a-little-boost-for-2013/
Everything will be okay in the end. If it's not okay, it's not the end.

fiveoh

  • Bristles
  • ***
  • Posts: 364
Re: 2013 IRA and 401(k) contribution amounts increased
« Reply #1 on: October 22, 2012, 09:29:32 AM »
Good to hear.  Thanks for the info!

Will

  • Pencil Stache
  • ****
  • Posts: 684
  • Location: Vancouver, WA
  • What the deuce?!?!?
Re: 2013 IRA and 401(k) contribution amounts increased
« Reply #2 on: October 22, 2012, 11:20:56 AM »
That extra $500/year will make all the difference!
"Money often costs too much."  -Ralph Waldo Emerson
"My other vehicle is an IRA."

Want YNAB for $6 off? Use this:  http://ynab.refr.cc/89THXPM

simonsez

  • Bristles
  • ***
  • Posts: 470
  • Age: 31
Re: 2013 IRA and 401(k) contribution amounts increased
« Reply #3 on: October 22, 2012, 12:17:18 PM »
Will, I like your humor and that truly is peanuts when considering just the one year.  But if you applied that logic from year to year starting in say, 1987 then a 401k limit change of 7k to 17.5k seems gigantic and very relevant.  Can become quite the slippery slope especially since compounding should be considered.

kudy

  • Pencil Stache
  • ****
  • Posts: 913
  • Age: 35
  • Location: Northern Colorado
Re: 2013 IRA and 401(k) contribution amounts increased
« Reply #4 on: October 22, 2012, 12:19:26 PM »
Sounds like a nice bump to me! As always, it's hilarious to read the comments sections on articles like this... more than 1 person claims that ordinary people can't possibly afford to contribute to an account.

Will

  • Pencil Stache
  • ****
  • Posts: 684
  • Location: Vancouver, WA
  • What the deuce?!?!?
Re: 2013 IRA and 401(k) contribution amounts increased
« Reply #5 on: October 22, 2012, 12:36:24 PM »
Will, I like your humor and that truly is peanuts when considering just the one year.  But if you applied that logic from year to year starting in say, 1987 then a 401k limit change of 7k to 17.5k seems gigantic and very relevant.  Can become quite the slippery slope especially since compounding should be considered.

Yeah, I was being sarcastic, but only because for those of us already trying so hard, it is peanuts.  I know that there are still all kinds of people out there who still won't contribute ANYTHING, and to them, the $500 is a huge increase.  Obviously, I'll take whatever bump they give us!
"Money often costs too much."  -Ralph Waldo Emerson
"My other vehicle is an IRA."

Want YNAB for $6 off? Use this:  http://ynab.refr.cc/89THXPM

thrifted

  • 5 O'Clock Shadow
  • *
  • Posts: 73
  • Location: New York City
Re: 2013 IRA and 401(k) contribution amounts increased
« Reply #6 on: October 22, 2012, 01:27:21 PM »
thanks for the update! this will now go into my spreadsheet :)

hoppy08520

  • Stubble
  • **
  • Posts: 101
Re: 2013 IRA and 401(k) contribution amounts increased
« Reply #7 on: October 22, 2012, 02:58:51 PM »
That extra $500/year will make all the difference!
The increase enables you to shelter/defer an additional 4.5% more from taxes (assuming you're maxing a 401(k) and IRA). If you do only IRAs, then it's 10% more. Not insignificant. I for one am happy about the increase. It helps with my "forced savings."

Debbie M

  • Stubble
  • **
  • Posts: 105
Re: 2013 IRA and 401(k) contribution amounts increased
« Reply #8 on: October 23, 2012, 03:32:21 PM »
I turn 50 next year and was finally going to be able to max my contributions at an amount that is evenly divisible by 12 (months).

Oh, well, I won't be making automatic contributions next year anyway because I don't have a steady job set up yet for next year.

Seriously, it hasn't gone up in a while, so this is nice to see.  (I thought they weren't admitting to that much inflation, though.  I-bond interest rates are still plummeting.)

chucklesmcgee

  • Pencil Stache
  • ****
  • Posts: 613
Re: 2013 IRA and 401(k) contribution amounts increased
« Reply #9 on: December 02, 2012, 09:19:29 PM »
That extra $500/year will make all the difference!
The increase enables you to shelter/defer an additional 4.5% more from taxes (assuming you're maxing a 401(k) and IRA). If you do only IRAs, then it's 10% more. Not insignificant. I for one am happy about the increase. It helps with my "forced savings."

These increases usually approximate for inflation.. Most compound interest calculators of these tax advantaged accounts usually don't account for increases in contribution limits over time. It has pretty substantial effects in the long term.

sheepstache

  • Handlebar Stache
  • *****
  • Posts: 2428
Re: 2013 IRA and 401(k) contribution amounts increased
« Reply #10 on: December 02, 2012, 09:55:28 PM »
I love the person who gets angry that, according to him, the gov't is saying CPI has gone up in re IRAs but barely in regards to SS payments and that they can't have it both ways.  Because he didn't bother researching any further and finding out it bumps up in $500 increments.  God it drives me INSANE when people act all passionate about something that, if you go by how much effort they actually put into learning about it, they barely give two shits about.

chucklesmcgee

  • Pencil Stache
  • ****
  • Posts: 613
Re: 2013 IRA and 401(k) contribution amounts increased
« Reply #11 on: December 03, 2012, 10:20:41 AM »
God it drives me INSANE when people act all passionate about something that, if you go by how much effort they actually put into learning about it, they barely give two shits about.

I DON'T WANT THE GOVERNMENT TAKING OVER MY MEDICARE!

grantmeaname

  • Magnum Stache
  • ******
  • Posts: 4299
  • Age: 25
  • Location: London
  • This night has silence and very little fear
    • The MMM Blogger Community
Re: 2013 IRA and 401(k) contribution amounts increased
« Reply #12 on: December 03, 2012, 12:10:42 PM »
I DON'T WANT THE GOVERNMENT TAKING OVER MY MEDICARE!
I WORRY THAT SENIORS HAVE THEIR HANDS ON MY SOCIAL SECURITY ACCOUNT.

sheepstache

  • Handlebar Stache
  • *****
  • Posts: 2428
Re: 2013 IRA and 401(k) contribution amounts increased
« Reply #13 on: December 03, 2012, 12:17:09 PM »
I DON'T WANT THE GOVERNMENT TAKING OVER MY MEDICARE!
I WORRY THAT SENIORS HAVE THEIR HANDS ON MY SOCIAL SECURITY ACCOUNT.
IT'S ALL THE FAULT OF THAT ATHEIST MUSLIM IN THE WHITE HOUSE!