2013 Retirement Account Limits

There was a lot of bad news at the end of last year thanks to the fiscal cliff, but there were also a few bright spots. One of these rays of light shined on your 2013 retirement account limits in the form of increased contribution amounts. Most of your maximum contribution limits increased, as did the Foreign Earned Income Exclusion.

IRA Contribution (Traditional and Roth) have increased: (For age 49 and younger) $5,500 (for age 50 and higher) $6,500

SEP IRA Limits

(For age 49 and younger) $51,000 (for age 50 and higher) $56,500

SIMPLE IRA Limits

(For age 49 and younger) $12,000 (for age 50 and higher) $14,500

IRA Contribution Limits if you are also covered by a retirement plan at work

(married filing jointly, others see IRS chart)

• If you earn $95,000 or less – you may make a full IRA contribution
• If you earn $95,001 to $114,999 your allowable contribution phases out.
• If you earn $115,000 and over you may not also contribute to an IRA

Roth IRA Contribution Limits:

(married filing jointly, others see IRS chart)

• If you earn $178,000 or less – You may make a full Roth IRA Contribution
• If you earn $178,000 to $188,000 you allowable Roth Contribution phases out
• If you earn over $188,000 you may not make a Roth IRA Contribution

Solo 401(k)

As the employee: For you and your spouse up to 100% of earned income to a max of $17,500 each.

From Profit Sharing: 20% of Adjusted Net Business Profits up to $51,000 or $56,500 (Depending on your age). This is an excellent tool for the self-employed expat earning more than the Foreign Earned Income Exclusion and will be the subject of future articles.

With higher taxes in 2013, and your Foreign Earned Income Exclusion being crushed by a weak dollar, these new maximum contribution limits are more important than ever.