The 2012 403b contribution limits increased by $500, allowing you to contribute $17,000 to your 403b in 2012. This is up from the 2011 403b contribution limit, which was set at $16,500. The IRS sets the 403b contribution limit rules each year and made the decision to increase the contribution limit.
403b Contribution Limit Broken Down
The maximum 403b contribution limit of $17,000 per year divides out to equal $1,416.66 per month or $326.92 per week.
While most Americans don’t max out their 403b or 401k contributions, it’s important to know the limits in case you are able to contribute more to your retirement plan in a certain year.
403b Contribution Limits Over 50
The IRS allows you to make a ‘catch-up’ contribution equal to $5,500 per year. This is in addition to the 2012 403b contribution limit of $17,000. This means that in 2012, you can contribution $22,500 to your 403b if you are over 50.
You must also have taxable income equal to or exceeding your contribution amount. For example, if your taxable income is $16,000 in 2012, your 2012 403b contribution would max out at $16,000 regardless of your age. In other words, you cannot contribute more to a retirement plan than you are being taxed on for the year.
Always check with your employer to see if you’re getting close to maxing out your 403b.
Do you have a 403b? Were you aware of the 2012 403b contribution limit?