The Internal Revenue Service (IRS) has announced the cost‑of‑living adjustments affecting pension plans and other retirement-related limitations for the 2018 tax year.
Although many of the limits remain unchanged from 2017, some of the highlights include:
- The contribution limit for employees who participate in 401(k), 403(b), most 457 plans, and the federal government’s Thrift Savings Plan is increased from $18,000 to $18,500. The annual benefit under a defined benefit plan will increase from $210,000 to $215,000
- The catch-up contribution limit for employees aged 50 and over who participate in 401(k), 403(b), most 457 plans and the federal government’s Thrift Savings Plan remains unchanged at $6,000.
- The limitation on the annual benefit under a defined benefit plan under Section 415(b)(1)(A) is increased from $215,000 to $220,000.
For additional information, see our 2018 Maximum Benefits and Contribution Limits reference material.