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Retirement Savings Limits Set for 2012

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In October, the Internal Revenue Service (IRS) announced cost of living adjustments (COLAs) affecting dollar limits for pension plans and other retirement related items for the 2012 tax year.

Many of the retirement and pension plan limitations will change next year because the cost of living index met thresholds that trigger adjustments. The following change will affect the majority of Lehigh’s employees:

The elective deferral contribution limit for employees in 403(b) plans such as Lehigh’s has increased from $16,500 to $17,000.

This provides most employees with the opportunity save even more pre-tax income for retirement.

The amount of "catch up" savings earners age 50 and above may add to this amount annually remains steady at $5,500. This means that an employee who will be 50 or older during 2012 can save up to $22,500 tax-deferred during the new calendar year

A complete list of the new limits for 2012 is available on the TIAA-CREF website.


A New Year’s Resolution You Can Keep

The new year is a great time to assess your current retirement savings plan. Consider starting a Voluntary 403(b) Retirement Savings Plan (VRSP) account through Lehigh to maximize your pre-tax savings. You can start an account with as little as $15 per month.

If you already have a plan, think about upping your contribution. Even a small increase will add up over time. For more information, visit the Human Resources website or contact Human Resources at extension 83900.

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Spotlight is published monthly by Human Resources. Please address any comments to Hillary Kwiatek, Spotlight Editor, Human Resources, 428 Brodhead Avenue, send email to hik210@lehigh.edu, or call extension 85165.

Current and past issues of Spotlight can be viewed and searched at: Past Issues.