No big changes in IRS retirement plan limits
The IRS just released the 2017 retirement plan contribution limits, and the changes aren’t big ones.
This year, the U.S. Consumer Price Index didn’t trigger a cost-of-living adjustment (COLA) increase for the vast majority of plans, so the major plan limits will remain largely unchanged through 2017.
Employees will be able to continue to defer up to $18,000 into their qualified defined contribution plans, and an additional $6,000 for those over the age of 50, for a combined total of $24,000.
Make a note of these …
Here’s where the notable retirement plan limits stand for 2017:
- 401(k), 403(b) and 457 plan contributions remain at $18,000
- Catch-up contributions to 401(k), 403(b), 457(b) plans are limited to $6,000
- Catch-up contributions to SIMPLE 401(k) or regular SIMPLE plans are limited to $3,000
- The annual defined-contribution limit from all sources will go to $54,000
- The employee compensation limit for calculating contributions to plans rises to $270,000
- The limit on annual IRA contributions remains capped at $5,500
- The IRA catch-up contribution limit (which is not tied to inflation) remains $1,000
- The limitation on the annual benefit under a defined-benefit plan goes up to $215,000
- The annual compensation limit for grandfathered participants in governmental plans which followed 401(a)(17) limits (with indexing) on July 1, 1993, is $120,000.
- The earning threshold used to define a highly compensated employee will remain at $120,000, and
- The earning threshold for a key employee in a top heavy plan (or “officer) will go up to $175,000.
- The Social Security taxable wage base rises to $127,200.