Insights

Updated Employee Benefit Plan and IRA Quick Reference Table 2017 and 2018

Updated Employee Benefit Plan and IRA Quick Reference Table 2017 and 2018

Oct 23, 2017

The Internal Revenue Service has announced the cost-of-living adjustments applicable to dollar limitations for various qualified retirement plans and other amounts for 2018(1). Pension plan limitations changed for 2018 because the increase in cost-of-living index met the statutory thresholds that trigger their adjustments. Plan sponsors should verify that their administrative and payroll systems reflect the appropriate limits. Communications that specify benefit plan limits should be reviewed for accuracy before materials are given to participants.


2017 2018
Compensation limit—IRC Sec. 401(a)(17) $270,000 $275,000
Defined benefit plan annual benefit limit $215,000 $220,000
Defined contribution plan annual contribution limit $54,000 $55,000



Social Security tax wage base $127,200 $128,700
Highly compensated employee compensation threshold $120,000 $120,000
Key employee officer compensation threshold $175,000 $175,000



SEP compensation threshold $600 $600



401(k), 403(b), 457(b), and SARSEPs

Elective deferral limit(2) $18,000 $18,500
Catch-up contribution(3) $6,000 $6,000
SIMPLE Plan

Elective deferral limit(2) $12,500 $12,500
Catch-up contribution(3) $3,000 $3,000
IRA

Contribution limit(2) $5,500 $5,500
Catch-up contribution(3) $1,000 $1,000



Traditional IRA deduction phaseout (AGI)

Single, Head of Household—Active participant $62,000/$72,000 $63,000/$73,000
Married Filing Separate—Any spouse participates $0/$10,000 $0/$10,000
Married Filing Joint—Nonparticipating spouse $186,000/$196,000 $189,000/$199,000
Married Filing Joint—Participating spouse $99,000/$119,000 $101,000/$121,000



Roth IRA contribution eligibility (AGI)

Married Filing Joint $186,000/$196,000 $189,000/$199,000
Single, Head of Household $118,000/$133,000 $120,000/$135,000
Married Filing Separate—Any spouse participates $0/$10,000 $0/$10,000



Retirement saver’s credit eligibility (AGI)

Married Filing Joint $62,000 $63,000
Head of Household $46,500 $47,250
Married Filing Separate, Single $31,000 $31,500

(1)This table has been updated based on IRS News Release (IR-2017-177), October 19, 2017.
(2) This applies to the total of all elective deferrals an individual makes for the year to 401(k) plans, 403(b) plans, SARSEPs, and SIMPLE plans. However, deferrals to each SIMPLE plan in which the individual participates are also limited, as shown later in the table.
(3) Catch-up contributions are available each year to individuals who reach age 50 by December 31.

 

If you have any questions, or for more information about the 2018 cost-of-living adjustments for retirement plans, please contact Tom KriegBob BussSteve Blom, Marci Boyarski, or your Wipfli relationship executive.

Wipfli’s employee benefit services practice is an independent, fee-for-service consulting, recordkeeping, and compliance provider, dedicated to helping clients meet their employee benefit needs. Wipfli has been providing qualified and nonqualified plan services for over 30 years.