The IRS announced the 2018 cost-of-living adjustments to retirement plan limits. The following plan limits are increased effective January 1, 2018:
- Employee Contributions to 401(k) and 403(b) Plans: the contribution limit is increased from $18,000 to $18,500.
- Defined Contribution Plans: the limit on annual additions to a participant’s defined contribution account increases from $54,000 to $55,000.
- Defined Benefit Plans: the limitation on the annual benefit under a defined benefit plan increases from $215,000 to $220,000.
- Annual Compensation Limit: the maximum amount of annual compensation that can be taken into account for various qualified plan purposes increases from $270,000 to $275,000.
- Government Deferred Compensation Plans: the limit on deferrals under Section 457 (concerning deferred compensation plans of state and local governments and tax-exempt organizations) increases from $18,000 to $18,500.
Some limitations are not increased for 2018, including:
- The limitation for catch-up contributions to an applicable employer plan other than a SIMPLE 401(k) plan or SIMPLE IRA for individuals age 50 and over remains unchanged at $6,000.
- SIMPLE Plans: the maximum amount of compensation an employee may elect to defer remains at $12,500.
- IRS and Roth IRA Limits: the deductible amount for an individual making a deductible IRA contribution remains at $5,500. The Roth IRA limit of $5,500 remains unchanged as well.
If you have any questions on how these rules apply to give, please give us a call.