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Question: Have the IRS’ limits for 2014 Retirement Plans been released?
Answer: Many of the retirement plan annual limits are indexed for inflation. The IRS has just released the plan limits for 2014. Let’s look at those limits in some detail below.
Contribution Limits: IRA contributions are unchanged at $5,500. Catch-up contributions remain at $1,000.
Plan deferral limits are unchanged at $17,500. Catch-up contributions remain at $5,500.
The SEP — simplified employeed pension — contribution limit is now 25 percent of $260,000.
Simple deferrals are unchanged at $12,000. Catch-up contributions remain at $2,500.
IRA Deductibility. Any individual with earned income who has not reached the year they turn 70 ½ can make an IRA contribution. However, if they are covered by an employer plan or if their spouse is covered by a plan, they may not be able to deduct that IRA contribution.
Roth IRA Contribution Income Limits. Not everyone can make a Roth IRA contribution. Unlike an IRA, a Roth contribution can be made at any age. However, the individual must have earned income, but that income cannot exceed certain limits.
Wm. Steve Wright is managing member of The Wright Legacy Group, LLC, a registered investment advisory firm.