Q:

How did the 403b contribution limits change in 2014?

A:

Quick Answer

The 2014 contribution limits for a 403(b) did not change from 2013, advises the Internal Revenue Service. The contribution limit for the year was $17,500 and the catch up contribution limit for individuals over the age of 50 was $5,500.

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Full Answer

The employee contribution limit increased to $18,000 in 2015, states the IRS. The catch-up contribution limit also increased to $6,000. The total contribution limit to a 403(b) plan including both employee and employer contributions was $52,000, or 100 percent of the employees compensation, whichever is less.

A 403(b) plan is a retirement plan available to many teachers and government and nonprofit employees, advises U.S. News and World Report. Individuals contribute to the plan before income is taxed and the funds grow in the account tax-free. Upon retirement, individuals pay income tax on the money they withdraw.

These plans often offer fewer investment choices than other retirement plans, such as an IRA. Investment options for a 403(b) plan typically include fixed and variable annuities and mutual funds, states the Securities Exchange Commission. Individuals should ask questions about each investment option and know what fees they may have to pay. Some plans require investors to pay an annual fee or additional fees when they change investment choices.

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