Employer-sponsored retirement plan
Join the plan - If you haven’t
already, join your employer’s retirement plan as soon as you can to increase
your retirement savings. Many retirement plans have quarterly or semi-annual
entry dates.
Contact your employer immediately to
find out when you can participate in the plan, and then join on the next entry
date.
Salary deferral contributions - If
your employer’s plan allows you to contribute to the plan, remember that you
can decrease your taxable income by making pre-tax salary deferral
contributions. Many plans allow salary deferral elections to be submitted at anytime,
so review your contribution rate to ensure you are contributing as much as you
can.
The maximum annual salary deferral contributions
allowed for 2013 are:
•$17,500
to 401(k) or 403(b) plans
•$12,000
to SIMPLE plans
If you are 50 or older by the end of
the year, your plan may allow you to make additional catch-up contributions of:
•$5,500
to 401(k) or 403(b) plans
•$2,500
to SIMPLE plans
Your employer’s plan may match some
part of your salary deferral contributions. For example, your employer may
contribute 50 cents for each dollar that you contribute to the plan from your
salary up to a certain amount. Contact your employer for details and adjust
your salary deferrals to take full advantage of matching contributions.
Individual Retirement Arrangements
(IRAs)
For 2013, you may be able to
contribute to a traditional or Roth IRA the smaller of:
•$5,500
($6,500 if you are age 50 or older), or your taxable compensation for the year.
This is the most that you can contribute,
regardless of whether the contributions are to one or more traditional or Roth
IRAs or whether all or part of the contributions are nondeductible. Some
factors may limit or eliminate your ability to contribute to an IRA (for
example, your age, modified adjusted gross income, filing status and amount of
compensation). Also, the amount of traditional IRA contributions
that you can deduct from your taxable income depends on whether you or your
spouse were covered for any part of the year by an employer retirement plan if
your income is above certain thresholds. Remember, saving for retirement requires
planning! That is why you should periodically review your retirement savings
goals, savings options and annual contributions to maximize your retirement savings.IRS Circular 230 Disclosure
Pursuant to the requirements of the Internal Revenue Service Circular 230, we inform you that, to the extent any advice relating to a Federal tax issue is contained in this communication, including in any attachments, it was not written or intended to be used, and cannot be used, for the purpose of (a) avoiding any tax related penalties that may be imposed on you or any other person under the Internal Revenue Code, or (b) promoting, marketing or recommending to another person any transaction or matter addressed in this communication
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