The IRS has released the 2018 contribution limits! Since not everyone was awaiting them quite as eagerly as we were, here is a quick summary.
The good news is that both the 401(k) deferral limit and overall contribution/benefit limits increased, as did the maximum compensation limit. Most of the others remain unchanged from their 2017 levels.
Here's a rundown of the 2018 limits:
Compensation and Benefit Limits
- Annual compensation limit
- Increases from $270,000 to $275,000
- Salary deferral limit for 401(k) and 403(b) plans
- Increases from $18,000 to $18,500
- Salary deferral limit for SIMPLE IRAs
- Remains unchanged at $12,500
- Salary deferral limit for 457 plans
- Increases from $18,000 to $18,500
- Catch-up contribution limit for 401(k) plans
- Remains unchanged at $6,000
- Catch-up contribution limit for SIMPLE IRAs
- Remains unchanged at $3,000
- Annual additions limit for defined contribution plans
- Increases from $54,000 to $55,000
- Annual additions limit for defined benefit plans
- Increases from $215,000 to $220,000
- Social Security Wage Base
- Increases from $127,200 to $128,700
Testing Limits
- Highly compensated employee
- Remains unchanged at $120,000
- Key employee based on officer status
- Remains unchanged at $175,000
- Key employee based on 1% owner compensation
- Remains unchanged at $150,000
You can find a chart of these limits from 2015 to 2018 here in the DWC Knowledge Center. For more information on contributions and other plan sponsor requirements, visit the Knowledge Center here.
