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The Internal Revenue Service (IRS) has announced its 2018 cost-of-living adjustments (COLAs) for retirement plans. Many of the retirement plan limitations will stay the same for 2018, but there are some that will increase, including the participant contribution limit.
Some of the limits include:
The elective deferral limit (i.e., participant contribution limit) for 401(k), 403(b) and 457(b) plans increases to $18,500 for 2018. The catch-up contribution limit remains $6,000 for 2018.
The compensation limit (i.e., the maximum amount of compensation that can be considered for plan purposes) increases to $275,000 for 2018.
The annual addition contribution limit (i.e., that maximum amount of combined employee and employer contributions that can be contributed to a participant’s account) for individuals in defined contribution plans, such as 401(k) and 403(b)plans, increases to $55,000 for 2018. This amount does not include catch-up contributions.
The compensation threshold for determining highly compensated employees for purposes of nondiscrimination testing remains $120,000 for 2018.
The compensation threshold for determining officer key employees for purposes of top heavy testing remains $175,000 for 2018.
The Social Security Wage Base increases to $128,700 for 2018.
If you would like to see all of the cost of living adjustments, please click here.