Financial New Year’s Resolution—Pay Yourself First

For many of us, January is a time to make New Year’s Resolutions. For others, it is a time to start sorting through the bills leftover from the holidays. Regardless of your situation, it is important to put yourself first…especially when it comes to your retirement. Each year, it is wise to consider increasing the amount you save to your 401(k) or other retirement plan and the new 2012 salary deferral limits may encourage you to make a change to your current savings plan.

There have been several changes to the Pension Plan Limits for 2012. The Salary Deferral Limits for 401(k), 403(b), & 457(b) plans have been increased to $17,000 (from $16,500). Unfortunately, for all those individuals over the age of 50, the catch-up contribution limits remain the same at $5,500.

Quick Summary:
• Annual addition limit (now $50,000, formerly $49,000);
• Salary deferral limit (now $17,000, formerly $16,500);
• Maximum compensation to be considered (now $250,000, formerly $245,000);
• Compensation used to determine a Highly Compensated Employee (now $115,000, formerly $110,000);
• Compensation used to determine a Key Employee (now $165,000, formerly $160,000);
• Social Security taxable wage base (now $110,100, formerly $106,800);
• The catch-up contribution limit remains the same ($5,500).

*****
Richard is the Director of Retirement Plan Services for Planning Solutions Group.  He provides the strategic oversight to the firm’s retirement plan consulting services, and also provides the oversight of the firm’s design, servicing, and monitoring of the retirement plan services offered to our clients.  Richard has been working in the financial services industry since 1994.  As a Retirement Specialist with Brown Advisory in Baltimore, he was responsible for coordinating the marketing, sales, and client service efforts for the firm’s brokers and strategic advisors.  Prior to that, he spent 12 years at T. Rowe Price in Baltimore, working with their largest institutional clients in varying capacities including client service and marketing.  Additionally, he was the manager for the firm’s institutional proposal support team.  Richard holds his FINRA Series 6, 7, 63, 65 and Life & Health Insurance licenses.  Richard graduated from Towson University where he majored in Economics and Political Science.