On October 23, 2014 the IRS announced 2015 cost-of-living adjustments for annual contribution and other dollar limits affecting 401(k) and other retirement plans. A 1.7% rise in the September CPI-U over 2013 triggered $500 increases to the annual maximum salary deferral limit for 401(k) plans, and the catch-up limit for individuals age 50 or older. Citations below are to the Internal Revenue Code.
Limits That Increase for 2015 Are As Follows:
–The annual Salary Deferral Limit for 401(k), 403(b), and most 457 plans, currently $17,500, increases $500 to $18,000.
–The age 50 and up catch-up limit also increases $500, to $6,000 total. This means that the maximum plan deferral an individual age 50 or older in 2015 may make is $24,000.
–Maximum total annual contributions to a 401(k) or other “defined contribution” plans under 415(c) increased from $52,000 to $53,000 ($59,000 for employees aged 50 and older).
–Maximum amount of compensation on which contributions may be based under 401(a)(17) increased from $260,000 to $265,000.
–The compensation threshold for determining a “highly compensated employee” increased from $115,000 to $120,000.
–The compensation threshold for SEP participation increased from $550 to $600.
–The SIMPLE 401(k) and IRA contribution limit increased $500 to $12,500.
–The Social Security Taxable Wage Base for 2015 increased from $117,000 to $118,500.
Limits That Stayed The Same for 2015 Are As Follows:
–Traditional and Roth IRA contributions and catch-up amounts remain unchanged at $5,500 and $1,000, respectively.
–The compensation dollar limit used to determine key employees in a top-heavy plan remains unchanged at $170,000.
–The maximum annual benefit under a defined benefit plan remained at $210,000.