The Internal Revenue Service announced cost of living adjustments that affect the dollar limits for pension plans and other retirement-related items for the 2012 tax year.

Because of the change, the elective contribution limit for employees who participate in 401(k), 403(b), most 457 plans and the federal government's Thrift Savings Plan increased from $16,500 to $17,000. The catch-up contribution for those 50 and older remains at $5,500.

The deduction for taxpayers making contributions to a traditional IRA is phased out for singles and heads of household who are covered by a workplace retirement plan and have modified adjusted gross incomes (AGI) between $58,000 and $68,000, up from $56,000 and $66,000 in 2011. For married couples filing jointly, in which the spouse who makes the IRA contribution is covered by a workplace retirement plan, the income phase-out range is $92,000 to $112,000 up from $90,000 to $110,000. For an IRA contributor who is not covered by a workplace retirement plan and is married to someone who is covered, the deduction is phased out if the couple's income is between $173,000 and $183,000, up from $169,000 and $179,000.