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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 |