Employees 49 and under will be able to contribute $500 more to their plans because of the annual cost-of-living adjustment.  
 
This year affords many more choices for which they may need guidance. Your guidance!
 
They can choose to contribute to a 401(K) plan or an IRA. Contributions to either would be tax deductible.
 
Or employees can bite the bullet on the front end with a Roth IRA or a Roth retirement plan at work.
 
They can contribute to both types of plans as long as they do not exceed the allowable limit.
 
Employees over 50 can contribute an additional $5500 to traditional and Roth 401(K)s, 403(b) plans, and 457 plans for a total of $23,000 in contributions. This, too, is $500 more than last year.
 
Small business owners can contribute $12,000 to a SIMPLE plan and those over age 50 can add another $2500.
 
Those without plans at work and who are under age 70 ½ can still contribute to traditional IRAs and also to Roths as long as they don’t exceed the income thresholds. Those over 50 can also add another $1000 in the catch-up provision.
 
Income thresholds for Roths were raised for 2013, enabling more people to contribute.
 
Individuals making up to $112,000 can now make full contributions with the phase-out happening at $127,000. For couples, it’s 178,000 phasing out at $188,000.
 
You can find more of Franklin’s retirement checklist helpful tidbits here.
 

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