New Retirement Plan Contribution Limits for 2018 - A Global Tax Blog Article from KLR

Global Tax Blog

New Retirement Plan Contribution Limits for 2018

posted Nov 14, 2017 by Peri Ann Aptaker, Esq., CPA/PFS, CFP®, CBA in the Global Tax Blog

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The Internal Revenue Service has issued the annual cost of living adjustments for 401(k) contributions, pension plans, and other retirement related matters. There are a few changes to modified adjusted gross income limits that you’ll want to note.

The limits

Individual Retirement Plan Limits 2018

Contribution Limits 2018 2017 2016
IRA Contribution Limit $5,500 $5,500 $5,500
IRA Catch-Up Contributions $1,000 $1,000 $1,000

*The catch-up contribution limit for employees ages 50 and over who contribute to 401(k), 403(b), most 457 plans and the federal government’s Thrift Savings Plan remains unchanged at $6,000.

Phaseout ranges for 2018:

Traditional IRA MAGI Limits 2018 2017 2016
Married filing jointly; a spouse who participates in an employer-sponsored plan $101,000-$121,000 $99,000-$119,000 $98,000-$118,000
Married filing jointly; a spouse who does not participate in an employer sponsored plan $189,000-$199,000 $186,000 - 196,000 $184,000-$194,000
Single or Head of Household $63,000-$73,000 $62,000 - 72,000 $61,000-$71,000

For Roth IRAs, if your MAGI falls within the applicable range, you can make a partial contribution, but if it exceeds the top of the range, you are not allowed to make a contribution.

Roth IRA MAGI Limits 2018 2017 2016
Married filing jointly $189,000-$199,000 $186,000-$196,000 $184,000-$194,000
Single or Head of Household $120,000-$135,000 $118,000-$133,000 $117,000-$132,000

The contribution limit for workers who are enrolled in 401(k), 403(b), most 457(b), and the federal government’s Thrift Savings Plan has changed from $18,000 to $18,500.

As you’ll notice, the contribution limits and catch-up contributions remain the same for the New Year, as they have since 2013. The annual IRA limit is adjusted based on inflation every year, typically increasing in $500 increments, but the amount has remained stagnant since 2013. Instead, only income limits have increased for 2018.

Contact our Tax Team for more information.