The Internal Revenue Service has set higher contribution limits for 403(b) plans in 2013, giving Iowa State employees an opportunity to save a little more for their retirement nest eggs.
Employees age 49 and younger may add an additional $500 in voluntary contributions to their 403(b) plans next year, for a maximum of $17,500. Employees age 50 and older may add an additional $5,500 (same as 2012) to their 403(b) plans in 2013 on top of the $17,500. This contribution is considered a "catch up" for those employees who are nearing retirement.
Why the increase?
"There's an inflation component," said Ann Doty, retirement information consultant in human resource services. "Other governmental programs such as Social Security are periodically adjusted for inflation and retirement plans are also adjusted."
Who is eligible?
Iowa State employees with a budgeted salary may voluntarily contribute extra funds from their paychecks for retirement; hourly employees and post-doctoral students are not eligible. For more information, visit the HRS website.
What action is needed?
If you already are voluntarily saving additional funds in your 403(b) account and you want to change that amount for 2013, you will need to update the elective payroll reduction agreement form (PDF). If you wish to start saving additional funds, you first must notify one of the four companies ISU sponsors. They are TIAA-CREF, VALIC, MetLife or Ameriprise Financial. Or, contact Doty, 4-4521, who will assist you with completing the correct forms.
