Are 401K and IRA contribution limits increasing next year? If so, what are the new limits? Thank you!!
(Edit - I updated question to reflect 2013, and will update my answer accordingly)
While a seemingly simple question, next year may be different. Interestingly, the 2010 contribution limits for 401(k) and IRA plans is tied to the rate of inflation. PF blogger fivecentnickel.com posted the following article, 401(k) Limits to Decrease in 2010?, which mentioned:
There's also a good article at CNNMoney.com, New rule may mandate lower 401(k) contribution limits in 2010. Check it out, too.
The final limits are supposed to be announced some time in October (i.e. later this month.) I'll post a follow-up when I read about the announcement.
UPDATE: The final 2010 401(k) contribution limits were announced by the IRS; see this IRS press release:
In other words, the 2010 employee contribution / deferral limit for a 401(k) plan is to be the same as in 2009: $16,500. If you are age 50 or over, additional catch-up contributions for a 401(k) plan remain limited to $5,500.
For Individual Retirement Accounts, the contribution limit for 2010 is also to be the same as in 2009: $5,000. If you are age 50 or over, additional catch-up contributions for an IRA remain limited to $1,000.
2013 sees increases for IRA, $5500, or $6500 if 50 or older in 2013. 401(k) limit increased $500 to $17,500, or $23,000 if 50 or older in 2013.
The basic limitations are as follows.
401(k) and 403(b) contribution limits (traditional and Roth combined)
IRA contribution limits (traditional and Roth combined)