LAST REVIEWED Apr 05 2019 3 MIN READ
By Margarette Jung
Note: Are you reading this in 2018? Here are the new updates about the increased maximums. The IRS just released the 2017 contribution limits, and assuming you don’t find IRS updates as exciting as we do, we’ve summarized the main takeaways for you below :).
Unchanged IRS Annual Contribution Limits for 2017
These are the most relevant for employees who already have or will have a 401(k) and/or IRA in 2017:
The contribution limit for employees who participate in 401(k) and 403(b) plans remains unchanged at $18,000.
The catch-up contribution limit for employees aged 50 and over who participate in 401(k) and 403(b) plans remains unchanged at $6,000.
The limit on annual contributions to an IRA remains unchanged at $5,500. The additional catch-up contribution limit for individuals aged 50 and over is not subject to an annual cost-of-living adjustment and remains $1,000.
Minor Changes in Annual Compensation Limits for 2017
These are minor but important changes for company HR administrators and business owners who currently offer or will be setting up a 401(k):
The annual compensation cap has been increased from $265,000 to $270,000. This is used mainly when calculating maximums for company match.
The compensation threshold for officers to be key employees has been increased from $170,000 to $175,000.
End of Year 401(k) Reminders for Employers and Employees
401(k) IRS Compliance Non-Discrimination Testing Deadlines (for employers)
Profit Sharing Plans (for employers looking for last-minute corporate tax savings)
401(k) Contribution Limits: How to Save the Maximum Amount (for employees)
We hope you found this helpful and that the end of 2016 is going well! What’s up next? Check out 401(k) Trends in 2017.
Margarette Jung is a former Head of Marketing at Human Interest.