What You Should Know About 401(k) and IRA Changes in 2014

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Editor's Note: A previous version of this article stated that the IRA catch-up limit was $1,100 instead of $1,000. The Fool regrets the error.

Next year will bring subtle changes to 401(k) and IRA rules, with the changes mostly happening for IRAs. There will be one shared change for both retirement plans that introduces a bigger saver's credit threshold which should please many more people.


The contribution amount workers can put toward their IRAs will stay the same, at $5,500 in 2014, with individuals ages 50 and up being able to contribute the same catch-up contribution range as last year, up to an additional $1,000.

IRA income limits will change in the following ways:

  • Those who have a workplace retirement plan with modified adjusted gross incomes of $60,000 to $70,000 will not be eligible to file for a tax deduction, up from last year's range of $59,000 to $69,000.
  • Married couples with workplace retirement plans making between $96,000 to $116,000 per household will not be able to file for the tax deduction either, also up $1,000 from last year.
  • Investors without a workplace retirement who are married to a spouse that has one, if their shared income is between $181,000 and $191,000, they will not be eligible for the tax deduction, up $3,000 from 2013.
  • Roth IRA income cutoffs will be larger, as workers can now earn an additional $2,000 more, with couples being able to earn an additional $3,000 and still qualify to contribute to a Roth IRA.
  • Individuals with an adjusted gross income of $114,000 to $129,000 will not qualify for a Roth IRA, nor will married couples making between $181,000 to $191,000.


Like the IRA contribution limits, 401(k) contributions will remain the same, with the maximum being $17,500. This extends to taxpayers contributing to their 401(k), 403(b) and most 457 plan, as well as the federal government's Thrift Savings Plan. Employees 50 and older will be able to contribute an additional $5,500, the same as last year.

Overlapping changes

Great news for low and moderate income workers saving in 401(k)s and IRAs, who can claim a tax credit that could be up to $1,000 for individuals, and $2,000 for married couples. Couples will be eligible to claim the saver's credit up until their adjusted gross income exceeds $60,000 (up $1,000 from 2013), heads of household can claim the credit until theirs AGI exceeds $45,000, and individuals can claim it until they reach $30,000.

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Read/Post Comments (5) | Recommend This Article (38)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On December 26, 2013, at 10:18 AM, sabebrush6 wrote:

    What scares the hell out of me is that the fed. gov't will default on Savings Bonds that they have started to push for lately.

  • Report this Comment On December 26, 2013, at 10:57 AM, nofway9 wrote:

    The catch up of 1,100 is incorrect and needs to be edited out immediately. It is still 1,000 for 2014.What is your source? Mine is:,-Employ...

    RA Catch-Up Amounts

    You can make catch-up contributions to your traditional or Roth IRA up to $1,000 (in 2013 and 2014). Catch-up contributions to an IRA are due by the due date of your tax return (not including extensions).


  • Report this Comment On December 28, 2013, at 8:09 PM, waldeje wrote:

    What scares me more is the rumor that the GOV is going to require all retirement accounts to hold a minimum of 15% of their holding in T-Bills. As Leon Cooperman so aptly put it: "Buying US government bonds at this juncture is like walking in front of a steamroller to pick up a dime". No Thanks

  • Report this Comment On December 28, 2013, at 10:01 PM, hochwald wrote:

    I don't understand Ms Muniz's writing. Take, for example, the last bullet under the IRA heading that individuals with income between $114K and $129K wont qualify for a Roth. So you're OK if you make $130K or more?

    There is bad grammar and confusing writing in other places as well. This article sounds rather amateur, please proof-read or get writing help!

  • Report this Comment On January 03, 2014, at 3:55 PM, Liberty4Freedom wrote:

    Is there not (1) One person, who KNOWS & is very confident, THAT, " TAXES are way to much ?"

    Are there any Lacking confidence, that "Mexification of America" has been the hammer, which is pounding the heads of every "investor Retirement Plan", in America ?

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