Cost-of-Living Adjustments for 2018
Article
The IRS has announced the 2018 cost-of-living adjustments for various retirement plan dollar limits. The 2018 limits are as follows:
1 An employee with compensation exceeding $120,000 in 2018 will be an HCE in 2019.
2 5% owners and 1% owners with compensation exceeding $150,000 are also key employees.
| Limit | 2016 | 2017 | 2018 |
| Section 402(g) limit for 401(k) pre-tax contributions | $18,000 | $18,000 | $18,500 |
| Section 414(v) catch-up contribution limit | $6,000 | $6,000 | $6,000 |
| Section 401(a)(17) limit on annual compensation recognizable for retirement plan purposes | $265,000 | $270,000 | $275,000 |
| Annual pre-tax contribution rate for participants at the compensation limit to reach the Section 402(g) contribution limit | 6.79% | 6.67% | 6.73% |
| Section 415 limit on annual additions to a defined contribution plan | $53,000 | $54,000 | $55,000 |
| Section 415 limit on annual benefits under a defined benefit plan | $210,000 | $215,000 | $220,000 |
| Compensation threshold for defining “Highly Compensated Employees” | $120,000 (in 2015) | $120,000 (in 2016) | $120,0001 (in 2017) |
| Compensation threshold for officers to be “Key Employees”2 | $170,000 | $175,000 | $175,000 |
| Social Security (OASDI) Wage Base | $118,500 | $127,200 | $128,700 |
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