20 October 2017 IRS releases the qualified retirement plan limitations for year 2018 — 401(k) pretax limit rises to $18,500 Update 10/27/2018: In Revised N-2017-64, the IRS issued a revised factor for adjusting a participant's high-3 compensation limitation under Section 415(b)(1)(B) for plan years beginning on or after January 1, 2018. The revision is necessary due to the Bureau of Labor Statistics’ adjustment of the CPI-U for the months of July and August 2016, which are used in the calculation of the factor. After taking into consideration the adjustments made by the BLS, the factor is 1.0197. The dollar limitations for qualified retirement and certain non-qualified plans that become effective January 1, 2018 were released by the IRS in Notice 2017-64. The dollar limitations that are adjusted by reference to Section 415(d) are modified annually for inflation and consequently, most of them are changed for 2018. Of particular note, the 2018 pretax limit that applies to elective deferrals to 401(k), 403(b) and most 457(b) plans is increased to $18,500, up from $18,000 that applied since 2015. The dollar limitation for catch-up contributions for participants age 50 or over is unchanged at $6,000. Plan participants in qualified retirement plans will need to consider the impact of the 2018 dollar limitations in their overall financial planning. Included is a summary of some of the cost-of-living adjustments applicable to dollar limitations for qualified retirement plans and other items for 2018. Document ID: 2017-1747 |
