Offered the plans' beneficial tax breaks, it tends to make sense to invest the maximum in the event you can. You will find annual limits. In 2012, if you're below 50 years old, you are able to contribute a maximum of $17,000. If you are 50 or older, you are able to make an extra catch-up contribution of as a lot as $5,500, to get a total of as much as $22,500.
These contribution limits alter annually to track inflation. The purpose: Inflation will steadily decrease the worth of a dollar, which means you'll require to contribute much more dollars to possess exactly the same buying energy.