Yesterday the IRS announced the retirement plan limitations that will apply for 2017. A complete listing and description of the 2017 retirement plan limitations can be viewed on the IRS website here.
Following are the most noteworthy limitations that were part of the IRS announcement:
- The salary deferral contribution limit for employees who participate in 401(k), 403(b), most 457 plans, and the federal government’s Thrift Savings Plan remains unchanged at $18,000.
- The “catch-up” salary deferral contribution limit for employees aged 50 and over who participate in 401(k), 403(b), most 457 plans, and the federal government’s Thrift Savings Plan remains unchanged at $6,000.
- The limit on annual contributions to an IRA remains unchanged at $5,500. The additional “catch-up” contribution limit for individuals aged 50 and over is not subject to an annual cost-of-living adjustment and remains $1,000.
- The total annual contribution limitation for participants in defined contribution plans (under Section 415(c)(1)(A)) is increased in 2017 from $53,000 to $54,000.
- The annual plan compensation limit (under Sections 401(a)(17), 404(l), 408(k)(3)(C), and 408(k)(6)(D)(ii)) is increased in 2017 from $265,000 to $270,000.
- The limitation for gross compensation used in the definition of highly compensated employee (under Section 414(q)(1)(B)) remains unchanged at $120,000.
Please contact us if you have questions about how the 2017 limitations will affect the administration of your retirement plan in 2017.