Retirement plan limits have not been adjusted for cost-of-living increases since 2009, due to low inflation.  But, for the upcoming year 2012, there are several increased limits:

·        The maximum employee 401(k) deferral limit is increased to $17,000 (up from $16,500 in 2011).

·        The "catch-up" 401(k) limit is unchanged at $5,500; thus providing a total 401(k) limit of $22,500 for participants who are age 50 or older at any time during 2012 (up from $22,000 in 2011).

·        Please note that the above-referenced 401(k) amounts might be further limited for "highly compensated employees" due to the applicable non-discrimination tests which apply to all 401(k) plans (other than Safe Harbor 401(k) plans). 

·        The maximum annual addition limit, which applies to the sum of all employee and employer contributions and forfeitures credited to a participant's account, is increased to $50,000 or $55,500 if age 50 (up from $49,000 and $54,500, respectively, in 2011).

·        The maximum amount of compensation considered for plan contribution purposes is increased to $250,000 (up from $245,000 in 2011).

·        The Social Security wage base is increased to $110,100 (up from $106,800 in 2011).

Please see our schedule of the key Retirement Plan Limits for 2012, as compared to 2011 and 2010.  more>