2012 401k Contribution Limits Have Increased (Finally!)

There are reasons for relief in some quarters since the IRS release its official 2011 regulations for 401k, 403b, and other retirement plan contribution limits.

This information is renewed annually based the 2011 cost of living adjustment figures.

The good news is that the cost of living adjustment (COLA) numbers have stayed the same.

This makes a three year period of relative stability in contribution limits. There were some fears circulating that the limits were supposed to be lowered for 2011.

Each October the limits are re-calculated using a formula that is based on the inflation rate (which is connected to the COLA figures) in the third quarter versus the previous year’s quarter performance.
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