11 Retirement Benefit Changes Coming in 2012

Expect more 401(k) fee disclosures and bigger Social Security checks next year.


More 401(k) match reinstatements. Most of the companies that suspended their 401(k) match during the recession have now restored them (75 percent), according to a Towers Watson survey of 260 companies that eliminated their match in January 2008 or later. The reinstatements primarily took place in January 2010 and January 2011. "We're expecting to see a continuation of that trend in 2012," says Credico.

Increased IRA income limits. IRA contribution limits will remain at $5,000 in 2012, and $6,000 for those age 50 and older. For singles and heads of household with retirement plans at work, the tax deduction for traditional IRA contributions will be phased out when their modified adjusted gross income is between $58,000 and $68,000 in 2012 ($92,000 to $112,000 for couples), up $2,000 from 2011. For those without a retirement plan at work, the income cutoffs will increase by $4,000 to between $173,000 and $183,000. The income limits for making Roth IRA contributions will grow by $3,000 ($4,000 for couples) to between $110,000 and $125,000 for singles and heads of household and $173,000 to $183,000 for couples in 2012.

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Increased access to the Saver's Credit. Workers with slightly higher incomes will be eligible for the Saver's Credit next year, a tax credit worth up to $1,000 ($2,000 for couples). Those who have modified adjusted gross incomes of up to $28,750 for singles, $43,125 for heads of household, and $57,500 for married couples and contribute to a retirement account such as an IRA or 401(k) will be able to claim the credit, an increase of $500 to $1,000 in income from last year.

Higher pension insurance limits. The maximum traditional pension benefit insured by the Pension Benefit Guaranty Corporation will be $55,840.92 for a 65-year-old retiree in 2012, up from $54,000 in 2011 and the first increase since 2009. As in previous years, the maximum insured amount is higher if you delay collecting your pension beyond age 65, and lower if you claim your pension early or elect to receive survivor's benefits.

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