For 2018, the Internal Revenue Service (IRS) increased several plan limitations to reflect cost of living adjustments. Below are some of these limits for 2018:
- Elective deferrals to 401(k), 403(b) and most 457 plans increased from $18,000 to $18,500
- The defined contribution limit increased from $54,000 to $55,000
- The defined benefit limit increased from $215,000 to $220,000
- The annual compensation limit increased from $270,000 to $275,000
- Various IRA-related phase-out AGI thresholds increased
Limitations that remain unchanged from 2017:
- Annual contributions to an IRA remains at $5,500 (plus $1,000 catch-up contributions for individuals over age 50)
- The catch-up contribution limit for employees aged 50 and over who participate in 401(k), 403(b) and most 457 plans remains at $6,000
- The definition of highly compensated employee remains unchanged at $120,000
- The limit on salary deferrals to a SIMPLE retirement plan also remains unchanged at $12,500 (plus $3,000 catch-up contributions for individuals over age 50)
See all of the updated limits on our website at www.bluebenefitsonline.com/irs-limits
Did You Know…
- that retirement can last for 30 years or more?
- you might need up to 80% of your current annual income to retire comfortably?
- the average monthly benefit paid by the Social Security Administration is $1,200? (per www.irs.gov)
A retirement plan can provide significant benefits to non-profit organizations and their employees including:
- A retirement plan can attract and retain better employees
- A plan will help their employees save for their future
- Employee contributions can reduce taxable income
- Employee contributions are easy to make through payroll deductions
There are various retirement plans available to offer such benefits. If you would like to find out more about establishing a plan or would like us to help evaluate whether your current plan maximizes benefits for your employees, please contact Holly Fields or your local office.