AMO Currents - IRS announces cost-of-living adjustments for retirement accounts

AMO Currents - Posted: October 28, 2008

IRS announces cost-of-living adjustments for retirement accounts

The Internal Revenue Service has announced cost-of-living adjustments for pension benefits and retirement accounts for tax year 2009.

401k Contributions: Among the changes published in the notice, the annual contribution limits to 401(k) accounts will increase from $15,500/year maximum contribution to $16,500 for 2009. Additionally, catch-up contributions will increase from $5,000 to $5,500, so individuals who will be 50 or older in 2009 may contribute a maximum of $22,000 in 2009.

Roth IRA: The adjusted gross income limitation for determining the maximum annual Roth IRA contribution for married taxpayers filing a joint return, or taxpayers filing as a qualifying widow(er), will increase to $166,000 from the current figure of $159,000. For all other taxpayers (other than married taxpayers filing separate returns), the adjusted gross income limitation will increase to $105,000 from the current figure of $101,000.

The IRS bulletin includes adjusted limitations applying to other pension and retirement benefits. The complete bulletin (IR-2008-118) is available on the IRS Web site at: http://www.irs.gov/newsroom/article/0,,id=187833,00.html.