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Pension Plan Limits For 2018 Tax Year Announced

October 25, 2017


THE IRS ANNOUNCED COST OF LIVING ADJUSTMENTS WHICH AFFECT DOLLAR LIMITATIONS FOR PENSION PLANS AND OTHER RETIREMENT-RELATED ITEMS FOR THE 2018 TAX YEAR.


Highlights:

  • The elective deferral (contribution) limit for employees who participate in 401(k) plans changes to $18,500.
  • The catch-up contribution limit for employees aged 50 and over who participate in 401(k) plans remains $6,000.
  • The total annual limit for contributions made to defined contribution retirement plans increases to $55,000.
  • The maximum compensation allowed to be used for retirement plan purposes increased from $270,000 to $275,000. 

 

Retirement Plan Limits for Plan Year

2018

2017

2016

401k Elective Deferrals $18,500 $18,000 $18,000
Catch-Up Contribution Limit $6,000 $6,000 $6,000
Annual Defined Contribution Limit $55,000 $54,000 $53,000
Annual Compensation Limit $275,000 $270,000 $265,000
Highly Compensated Employees $120,000 $120,000 $120,000
Top Heavy Key Employee Dollar Limit $175,000 $175,000 $170,000