Friday, 03 November 2017 11:28

401(k) Contribution Limit Increase

On October 19, the IRS announced an increase in the contribution limits for employees who participate in 401(k), 403(b), and most 457 plans. For 2018 the new limit will be increased from $18,000 to $18,500. However, the catch-up contribution limit for employees aged 50 or over remains unchanged at $6,000 annually.

Many other areas also saw no change:

·         IRA contribution limits remain unchanged from 2017

o   Traditional IRA: $5,500 annually with an additional $1,000 catch-up limit

o   Roth IRA: $5,500 annually with an additional $1,000 catch-up limit

o   SIMPLE IRA: $12,500

o   SEP IRA: $600

·         The limitation to define a highly compensated employee remains unchanged at $120,000

·         The limitation to define a key employee remains unchanged at $175,000

To read more about changes regarding pension plans, please click the link below

https://www.irs.gov/newsroom/irs-announces-2018-pension-plan-limitations-401k-contribution-limit-increases-to-18500-for-2018