The various retirement plan limits have been announced for 2012. Here is a brief recap:
Salary Deferral Limit for 401(k) and 403(b) Plans is $17,000 (up from $16,500). Additional Salary Deferral for someone Age 50 by 12/31/2012 is $5,500 (stayed the same). Therefore a 50 year old can defer up to $22,500 in 2012 (increased from $22,000). The maximum amount of compensation counted for plan purposes is $250,000 (previously $245,000). Maximum Annual Additions Limit from all contributions is $50,000 (increased from $49,000 and you can add $5,500 if age 50 or more if salary deferrals available). The maximum Defined Benefit Plan retirement amount is $200,000 per year ($190,000 a year previously). The amount of compensation in 2012 that would make someone an HCE in 2013 is $115,000 (up from $110,000 for 2009, 2010 and 2011). The new Social Security Taxable Wage Base is $110,100 (up from $106,800).
For a more complete chart go here: Retirement Plan Limitations Chart
This blog is intended to help educate professional firms with high income owners understand how they can add a Cash Balance Plan to their existing 401(k) plan in order to substantially increase their savings for the future.
If You Want More Information, Contact:
Paul Carlson
Cash Balance Consultant
(650) 425-7912
Cash Balance Consultant
(650) 425-7912
Robust Website on Cash Balance Plans
Kravitz Maximum Deduction Calculator
Blog Editor: Paul Carlson
Plan Design Consultants, Inc. works with high income professional firms on the advisability of a 401(k) Cash Balance Combination Plan for their entity. Our principal consultant for this purpose, Paul Carlson, is a certified Cash Balance Consultant. We team with the Kravitz firm who will provide the administration of the Cash Balance Plan. The 401(k) Cash Balance solution would allow high income professionals and business owners to substantially increase their pre-tax contributions to their retirement plans, usually with a modest increase in contributions for staff.