IRS Releases Retirement Plan Limitations for 2018 Plan Year

Posted on October 23, 2017

2017 Cost-of-Living Adjustments (COLA) LimitsOn October 19, 2017, the Internal Revenue Service announced the 2018 Cost-of-Living Adjustments (COLA)1 to the retirement plan limits.

Below is a chart outlining the COLA limits that become effective January 1, 2018, along with the two prior tax years’ limits:

PLAN LIMITS                                 

201620172018
Salary Deferral Limit for 401(k), 403(b), 457(b) Plans  (Code §402(g)(1)) (generally, a participant’s calendar year limit)$18,000$18,000$18,500
Catch-up Limit for 401(k), 403(b), 457(b) Plans  (Code §414(v)) (available to participants age 50 or older by December 31)$6,000$6,000$6,000
Maximum Annual Compensation for Retirement Plan Purposes  (Code §401(a)(17))$265,000$270,000$275,000
Maximum Defined Contribution Plan Annual Addition  (Code §415(c)) (effective for limitation years ending in designated year)$53,000$54,000$55,000
Social Security Taxable Wage Base$118,500$127,200$128,4002
Highly Compensated Employee (HCE) Compensation  (Code §414(q))$120,000$120,000$120,000
Top-Heavy Key Employee Compensation  (Code §416(i))$170,000$175,000$175,000

If you have any questions or wish to discuss the application of these limits to your retirement plan, please contact your ERISA Consultant at 417-889-4918 or 800-234-9584.

171020-2

Disclosure: Pension Consultants, Inc. is registered with U.S. Securities and Exchange Commission as an investment adviser.

                                            

1 https://www.irs.gov/pub/irs-drop/n-17-64.pdf
2 https://www.ssa.gov/news/press/factsheets/colafacts2018.pdf
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