We’re Giving Away $50,000! Enter Now. See Official Rules




Contests and

Free Fun!

AARP Games - Play Now!

PROGRAMS & resources

Best Employers for Workers Over 50

Check out the winners list and latest news about this AARP recognition program.

Employer Resource Center

Attract and retain top talent in a changing workforce.

Your Own Business

Information for business owners, entrepreneurs and the self-employed.


Learn From the Experts

Sign up now for an upcoming webinar or find materials from a past session. 

Most Popular


IRS Boosts Maximum 401(k) Contribution to $17,000

Increase required by law to adjust for inflation

WASHINGTON (AP) — The Internal Revenue Service is raising the maximum contribution that workers can make to their 401(k) pension plans without paying upfront taxes. The limit will rise by $500 to $17,000 next year.

The increase is required by law to adjust for inflation. The ceiling hadn't grown since 2009 because inflation had been too low to trigger an increase.

See also: AARP 401(k) fee calculator.

Companies that set up 401(k) plans for their employees are free to limit maximum contributions at levels below the legal ceiling, and many do.

Thirty-three percent of workers ages 21-64 used 401(k) plans in 2009, the most recent year for which figures are available, according to the Employee Benefit Research Institute, a nonpartisan research group that advocates strong employee benefit programs.

Only 9 percent of people with a 401(k) contributed the maximum dollar amount to their plans in 2005, the most recent year for which that data is available, the institute said.

The IRS also is making inflation adjustments to the personal exemption, tax brackets and other parts of the tax code for 2012.

The personal exemption and the dependent exemption will grow to $3,800 each, a $100 increase from 2011.

The standard deduction for married couples filing jointly will rise by $300 to $11,900, while the standard deduction for single people will increase by $150 to $5,950. The standard deduction is used by the almost two-thirds of taxpayers who do not itemize deductions for items such as mortgage interest.

Tax brackets will change, too. For married couples filing a joint return, the taxable income at which the rate grows from 15 percent to 25 percent will be $70,700, compared with $69,000 this year.

The changes are all for the 2012 tax year. Most people will file their returns for that year at the beginning of 2013.

Also of interest: See other options before tapping 401(k) early.>>

Topic Alerts

You can get weekly email alerts on the topics below. Just click “Follow.”

Manage Alerts


Please wait...

progress bar, please wait

Tell Us WhatYou Think

Please leave your comment below.


Jobs You Might Like

Discounts & Benefits

From companies that meet the high standards of service and quality set by AARP.

Member Benefits AT&T Wireless Cell Phone

Members save 10% on monthly usage charges on qualified AT&T wireless plans.

membership adt

Small business owners save 20% on new installation of any new ADT security system.

UPS Store membership discount aarp benefits

Members save 15% on eligible products/services and 5% on UPS shipping at The UPS Store®.

Member Benefits

Renew today! Members receive exclusive member benefits & affect social change.

Rewards for Good

Your Points Balance:

Learn More

Earn points for completing free online activities designed to enrich your life.

Find more ways to earn points

Redeem your points to save on merchandise, travel, and more.

Find more ways to redeem points


Advance your skills. Transform your career.

Explore your learning possibilities.