Retirement benefits will change in a variety of important ways in 2013. Workers will be eligible to contribute $500 more to their retirement accounts, and get new information about the fees that are deducted from their savings. Retirees will receive slightly bigger Social Security checks and improved Medicare Part D coverage in exchange for modestly higher premiums. Social Security taxes will also increase for many workers if the payroll tax cut expires. Here’s a look at retirement-benefit changes you can expect to see next year:
Higher 401(k) and IRA contribution limits. The contribution limit for 401(k)s, 403(b)s, and the federal government’s Thrift Savings Plan will increase from $17,000 in 2012 to $17,500 in 2013. The IRA contribution limit will also grow by $500 to $5,500 in 2013. However, catch-up contributions available to those age 50 and older will remain unchanged for both types of accounts, at $5,500 for 401(k)s and $1,000 for IRAs.
More 401(k) fee information. Retirement-account participants will receive new quarterly and annual 401(k) statements listing the expense ratios of each investment option and other fees charged to their accounts including commissions, sales charges, and recordkeeping fees, due to new Labor Department regulations enacted in 2012. Retirement savers will also get information showing how their investment returns compare to a benchmark. “If there are lower-fee funds within the fund choices, I would hope that would be an incentive to change within the fund choices,” says Michele Clark, a certified financial planner for Clark Hourly Financial Planning in Chesterfield, Mo.