On October 28, 2017 the IRS announced 2017 cost-of-living adjustments for annual contribution and other dollar limits affecting 401(k) and other retirement plans. Salary deferral limits to 401(k) and 403(b) plans remained unchanged for the second year in a row, but other dollar limit adjustments were made. Citations below are to the Internal Revenue Code.
Limits That Remain the Same for 2017 Are As Follows:
–The annual Salary Deferral Limit for 401(k), 403(b), and most 457 plans, currently $18,000, stays the same.
–The age 50 and up catch-up deferral limit, currently $6,000, also remains the same. For 2017 as in this year, the maximum salary deferral an individual age 50 or older may make is $24,000.
–The compensation threshold for determining a “highly compensated employee” remains unchanged at $120,000.
–Traditional and Roth IRA contributions and catch-up amounts remain unchanged at $5,500 and $1,000, respectively.
–The compensation threshold for SEP participation remained the same at $600.
–The SIMPLE 401(k) and IRA contribution limit remained the same at $12,500.
Limits That Changed for 2017 Are As Follows:
–The maximum total annual contribution to a 401(k) or other “defined contribution” plan under 415(c) increased from $53,000 ($59,000 for employees aged 50 and older) to $54,000 ($60,000 for employees aged 50 and olded).
–The maximum annual benefit under a defined benefit plan increased from $210,000 to $215,000.
–The maximum amount of compensation on which contributions may be based under 401(a)(17) increased from $265,000 to $270,000.
-The compensation dollar limit used to determine key employees in a top-heavy plan increased from $170,000 to $175,000.
In a separate announcement, the Social Security Taxable Wage Base for 2017 increased from $118,500 to $127,200.