Your 2013 Retirement Gift From The IRS

Don’t get too excited, it’s actually a very small gift — and it won’t put your retirement savings ahead of the game in any way. But it is better than nothing — I suppose — so here’s your 2013 retirement gift from the IRS.

Your 2013 retirement gift from the IRS. It won’t make your retirement much better.

Your 2013 retirement gift from the IRS

On Oct. 18, the IRS announced that the contribution limits for the most commonly used retirement accounts — IRAs and 401(k) plans — would be going up. For 2012, you can put as much as $5,000 into an IRA and up to $17,000 in a 401(k) account. In 2013 those amounts increase $500 for both types of accounts. The additional amounts that those age 50 or older are allowed to put in will remain the same – an extra $1,000 for IRAs and $5,500 for 401(k)s.

It baffles me that you can still contribute more to a 401(k) — with all their problems — than you can to an IRA which gives you much more flexibility in planning and saving for your retirement. But that’s the government for you….

The reason for the changes? Inflation. Inflation adjustments are designed to let your retirement savings keep pace with rising costs of living.

You’re being thrown a bone so that at least — hopefully — your retirement savings can keep up with inflation; assuming you can afford to plunk down all that cash and still make ends meet.

The real problem is that so many Americans have been beaten down by the poor judgment and misguided policies of big business and the government, that we can barely save anything at all. So, happy new year and here’s your 2013 retirement “gift” from the IRS.

Click here to read more about your 2013 retirement gift from the IRS.

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