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10.19.2017 Benefit and Contribution Limits for 2018 By: Marc Purintun; Elinor H. Clendenin ; Brydon M. DeWitt; Robert B. Hamlett, Jr.; Nona K. Massengill & Marie D. Yascko-Rosado

The Commissioner of Internal Revenue announced the 2018 dollar limitations for benefits and contributions that apply to retirement plans. Some limits have increased while others remained the same. The Social Security Administration increased the Social Security taxable wage base. Increases for health savings accounts were announced this summer.  The following chart shows the 2018 limits and the similar limits for 2017.

Benefit Limits Under the Internal Revenue Code and Social Security

Description

2017 Limit

 2018 Limit

Compensation Cap under 401(a)(17)

$270,000

$275,000

Elective Deferral Limitation under 402(g)(1) for elective deferrals for 401(k) plans, SEPs and 403(b) plans

$18,000

$18,500 

Catch-Up Contributions for Individuals Age 50 and Older

$6,000

$6,000

Defined Benefit Maximum Annual Accrual

$215,000

$220,000 

Defined Contribution Maximum Annual Addition

$54,000

$55,000 

Highly Compensated Employee Compensation Limit

Key Employee in Top-Heavy Plans Compensation Limit

$120,000

$175,000

$120,000 

$175,000 

ESOP threshold for determining maximum account balance subject to 5-year distribution period

Regular Limit
Additional amount to lengthen 5-year period

 

 
$1,080,000
$215,000

 


 $1,105,000
$220,000

SEP Compensation Threshold for Participation

$600

$600 

SIMPLE IRA Maximum Pre-Tax Contribution

$12,500

$12,500 

Catch-Up Contributions for SIMPLE IRAs or SIMPLE 401(k) plans

$3,000

$3,000

Deferral Limit for 457(b) Plans of Government
and Tax-Exempt Entities (457(b))

$18,000

$18,500 

IRA Maximum Deduction

$5,500

$5,500 

Social Security Taxable Wage Base

  $127,200

$128,700 

Health Savings Account Maximum Contributions

Family Coverage
Single Coverage

 

$6,750
$3,400

 

$6,900
$3,450