IRS Announces 2011 Benefit Limits

The Internal Revenue Service (IRS) on Thursday announced that the 2011 deferral limit for 401(k), 403(b) or 457(b) plans and the federal government’s Thrift Savings Plan is unchanged at $16,500.

According to the tax agency’s annual announcement on pension-related limits, the limitation for defined contribution plans under Section 415(c)(1)(A) remains unchanged for 2011 at $49,000.

The limitation on the annual benefit under a defined benefit plan under section 415(b)(1)(A) also remains unchanged at $195,000. For a participant who separated from service before January 1, 2010, the participant’s limitation under a defined benefit plan under section 415(b)(1)(B) is unchanged.

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The catch-up contribution limit for those aged 50 and over remains at $5,500 for 2011.

Generally, the IRS said, the 2011 figures reflect either no changes or small inflation adjustments. The limitations that are adjusted by reference to Section 415(d) generally will remain unchanged for 2011. The agency said this is because the cost-of-living index for the quarter ended September 30, 2010, while greater than the cost-of index for the quarter ended September 30, 2009, is less than the cost-of-living index for the quarter ended September 30, 2008, and, following the procedures under the Social Security Act for adjusting benefit amounts, any decline in the applicable index cannot result in a reduced limitation.

 Other limits announced in the IRS notice include:

  • The AGI limit for the saver’s credit (also known as the retirement savings contributions credit) for low-and moderate-income workers is $56,500 for married couples filing jointly, up from $55,500 in 2010; $42,375 for heads of household, up from $41,625; and $28,250 for married individuals filing separately and for singles, up from $27,750.
  • The AGI phase-out range for taxpayers making contributions to a Roth IRA is $169,000 to 179,000 for married couples filing jointly, up from $167,000 to $177,000 in 2010. For singles and heads of household, the income phase-out range is $107,000 to $122,000, up from $105,000 to $120,000. For a married individual filing a separate return who is an active participant in an employer-sponsored retirement plan, the phase-out range remains $0 to $10,000.
  • The deduction for taxpayers making contributions to a traditional IRA is phased out for singles and heads of household who are active participants in  an employer-sponsored retirement plan and have modified adjusted gross incomes (AGI) between $56,000 and $66,000, unchanged from 2010. For married couples filing jointly, in which the spouse who makes the IRA contribution is an active participant in an employer-sponsored retirement plan, the income phase-out range is $90,000 to $110,000, up from $89,000 to $109,000.

More information on the 2011 limits is at http://www.irs.gov/newsroom/article/0,,id=229975,00.html.

AdvisorVision Keeps Plans in Focus

A recent upgrade to AdvisorVision monitors retirement plans and automatically alerts advisers when something in the plan requires their immediate attention.

This upgrade to AdvisorVision 7.5 will enable advisers to access their client data through a dashboard on the Web or via a mobile device such as an iPad or a smartphone, according to a press release from Fiserv Inc., a financial services technology solutions provider. Fiserv acquired AdvisorVision from AdviceAmerica in June of this year.  

According to the release, AdvisorVision uses a rule-based advice engine that can monitor a financial plan’s progress against set goals and adjust portfolios as needed. Another added feature is that users can set up email alerts based on more than a dozen criteria including date, age, portfolio, or net worth changes.   

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The “dashboard” feature can be used by advisers to see all of their client’s information on one page, or by the client to see their account information as well.    

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