Highlights of Changes for 2018

This is a good time of the year to review your YTD saving to see if you met your 2017 goals and to make any last minute changes prior to year end.

It is also a good time to start budgeting for 2018. The Internal Revenue Service just announced cost-of-living adjustments affecting certain dollar limitations for pension plans and other retirement-related limitations for 2018.

The following chart details the 2018 retirement plan dollar limitation cost-of-living adjustments and income limits.

Limitation Description 2017 2018
Maximum annual benefit under a defined benefit plan under IRC Section 415(b)(1)(A)  

$215,000

 

$220,000

Maximum annual contribution to an individual’s defined contribution plan account under IRC Section 415(c)  

$54,000

 

$55,000

Maximum amount of annual compensation that may be taken into account for determining benefits or contributions to retirement plans  

$270,000

 

$275,000

Maximum Section 401(k), 403(b) and 457(b) elective deferrals.

Catch-up contributions age 50+ unchanged

$18,000

 

$6,000

$18,500

 

$6,000

Traditional IRA and Roth IRA

Catch-up contributions age 50+ unchanged

$5,500

$1,000

$5,500

$1,000

Simple IRA

Catch-up age 50+

$12,500

$3,000

$12,500

$3,000

Health Savings Account

Single

Family Coverage

Catch-up age 55+

 

$3,400

$6,750

$1,000

 

$3,450

$6,900

$1,000

Resource: http://www.IRS.gov; http://www.hsabank.com

  • Wage Base For Social Security Tax increases to $128,700
  • Roth IRA Income Phase-out Limit

    Single /Head of Household increase to $120,000 – $135,000 ; Married Filing Jointly increases to $189,000 – $199,000 and Married Filing Separately remains at $0 – $10,000.

  • Traditional IRA Income deduction Limit

    Single not covered by work plan increases to $63,000 – $73,000; Married filing jointly both spouses covered by work plan $101,000 – 121,000; Married filing jointly, one spouses covered by work plan; limit for spouse with no work plan $189,000  – $199,000; Married filing separately $0 – $10,000.

 

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