2018 Benefit and Contribution Limitations Released

Earlier this month the IRS released the contribution limits for retirement and other plans for 2018.

The IRS annually reviews the contribution limits to determine if an adjustment is needed based on cost-of-living index and other economic data. The good news for most individuals is there were a key contribution limits increases which create an expanded savings opportunity. However, most limits will remain the same for the coming year. To help clients, prospects and others understand the limit changes and adjust their planning for 2018, Hanson & Co has provided a summary below.

RETIREMENT PLAN LIMITS: 2017 vs. 2018

  • Annual compensation limit
    • 2017: $270,000
    • 2018: $275,000
  • 401(k), 403(b) & 457(b) before-tax contributions
    • 2017: $18,000
    • 2018: $18,500
  • Catch-up contributions (if age 50 or older)
    • 2017: $6,000
    • 2018: $6,000
  • Highly compensated employee threshold
    • 2017: $120,000
    • 2018: $120,000
  • Key employee officer compensation threshold
    • 2017: $175,000
    • 2018: $175,000
  • Defined benefit plan annual benefit and accrual limit
    • 2017: $215,000
    • 2018: $220,000
  • Defined contribution plan annual contribution limit
    • 2017: $54,000
    • 2018: $55,000
  • Employee stock ownership plan (ESOP) limit for determining the length of the general five-year distribution plan
    • 2017: $215,000
    • 2018: $220,000
  • ESOP limit for determining the maximum account balance subject to the general five-year distribution period
    • 2017: $1,080,000
    • 2018: $1,105,000
  • Roth IRA and traditional IRA
    • 2017: $5,500
    • 2018: $5,500
  • Roth IRA and IRA catch-up contributions
    • 2017: $1,000
    • 2018: $1,000
  • SIMPLE salary deferral
    • 2017: $12,500
    • 2018: $12,500
  • SIMPLE catch-up limit
    • 2017: $3,000
    • 2018: $3,000

HEALTH AND WELFARE PLAN LIMITS: 2017 vs. 2018

  • Health Flexible Spending Accounts maximum salary reduction limit
    • 2017: $2,600
    • 2018: $2,650
  • High Deductible Health Plans (HDHP) – maximum annual out-of-pocket limit (excluding premiums):
    • Self-only coverage
      • 2017: $6,550
      • 2018: $6,650
    • Family coverage
      • 2017: $13,100
      • 2018: $13,300
  • HDHP – minimum annual deductible:
    • Self-only coverage
      • 2017: $1,300
      • 2018: $1,350
    • Family coverage
      • 2017: $2,600
      • 2018: $2,700
  • Health Savings Accounts (HSA) – annual contribution limit:
    • Self-only coverage
      • 2017: $3,400
      • 2018: $3,450
    • Family coverage
      • 2017: $6,750
      • 2018: $6,900
    • Catch-up contributions (age 55 or older)
      • 2017: $1,000
      • 2018: $1,000

SOCIAL SECURITY WAGE BASE

  • Social Security Maximum Taxable Earnings (dollars)
    • 2017: $127,200
    • 2018: $128,700

Contact Us

Plan sponsors should be sure to incorporate the new limits in participant communications, such as open enrollment materials and summary plan descriptions to reflect these changes. If you have questions about the changes or need assistance with your 401k or other retirement plan audit, Hanson & Co can help. For additional information please call us at (303) 388-1010, or click here to contact us. We look forward to speaking with you soon.