New Pension Plan Limits to Help You Plan for Your Retirement

BY HEATHER M. WONDERLY, AIF®, CPFA

In October, the IRS announced the cost of living adjustments for pension plan limits for 2017. In general, the limits will not change for 2017. Listed below are some of the limits:

  • The elective deferral (contribution) limit for employees who participate in 401(k), 403(b), most 457 plans, and the federal government’s Thrift Saving Plan will remain at $18,000.
  • The catch-up contribution limit for employees age 50 and over remains at $6,000.
  • The AGI (adjusted gross income) limits for the saver’s credit (also known as the retirement savings contribution credit) for low and moderate income workers have increased:
    • $62,000 for married couples filing jointly (up from $61,500 in 2016)
    • $46,500 for head of household (up from $46,125)
    • $31,000 for singles and married individuals filing separately (up from $30,750)
Plan Limits for Plan Year 2017 2017 2016
401(k) Elective Deferrals $18,000 $18,000
403(b)/457 Elective Deferrals $18,000 $18,000
Annual Defined Contribution Limit $54,000 $53,000
Annual Compensation Limit $270,000 $265,000
Catch-Up Contribution Limit $6,000 $6,000

MEET HEATHER

Heather provides guidance to 401(k) pension committees, helping them understand investments, compliance, fiduciary responsibility, and plan administration. She also provides ongoing employee education to plan participants.

Connect with Heather here.

Aldrich Wealth, LP, (“Aldrich Wealth”) is an investment advisor registered with the U.S. Securities and Exchange Commission. Aldrich Wealth Advisors provides wealth management services where it is appropriately registered or exempt from registration and only after clients have entered into an Investment Advisory Agreement confirming the terms of the client relationship, and have been provided a copy of Aldrich Wealth ADV Part 2A brochure document. The information contained in this document is provided for informational purposes only, is not complete, and does not contain material information about making investments in securities including important disclosures and risk factors. Under no circumstances does the information in this document represent a recommendation to buy or sell stocks, bonds, mutual funds, exchange traded funds (ETF’s), other securities or investment products.

The technical information in this newsletter is necessarily brief. No final conclusion on these topics should be drawn without further review and consultation. Please be advised that, based on current IRS rules and standards, the information contained herein is not intended to be used, nor can it be used, for the avoidance of any tax penalty assessed by the IRS.