Know your 2012 Contribution Limits

No excuses, friends, because the contribution limits for IRA, 401(k), 403(b), and 457(b) accounts has increased for 2012.

We mentioned the IRA increase once before, but you may or may not have been aware that the limits for the 401(k), 403(b), and 457(b) accounts has increased. If you take full advantage of these retirement vehicles, you could sock up to $17,000 toward retirement this year.

Individuals under age 50 can contribute up to $17,000 to their 401(k) account this year, that’s up $500 from 2011. If you’re over age 50, you can contribute an additional $5,500 for a total contribution of $34,500. The aggregate limit (employer + employee contributions), has increased to $50k/year.

These amounts might sound high, but putting just a portion of your paycheck away before it touches your hot little hands can really pay off. If these accounts are available to you, you shouldn’t pass them up.

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