2014 Plan Contribution Limitations

IRS has announced cost-of-living adjustments affecting retirement plan dollar limitation for tax year 2014. Some of the plan limitations will remain unchanged since the increase in the Consumer Price Index did not meet the statutory thresholds that trigger their adjustment.

 

  • 401(k), 403(b) and most 457 plan deferrals remain $17,500 (catch-up contribution will stay at $5,000)
  • IRA maximum annual contribution remains $5,500 (additional catch-up remains $1,000)
  • Annual addition limit for Defined Contribution Plans (maximum annual combined employee and employer deferral) increased from $51,000 to $52,000
  • Annual benefit limit from Defined Benefit Plans (maximum) is now equal to the lesser of $210,000 (up from $205,000 in 2013) or 100% of the participant’s average compensation for the highest three years, adjusted for inflation
  • Limit on annual compensation (maximum) used to determine qualified plan benefits or contributions increased from $255,000 to $260,000
  • Highly compensated employee dollar limitation remains unchanged at $115,000
  • Key employees in top-heavy plans- compensation limit taken into account in determining who is a key employee under top-heavy plans increased from $165,000 to $170,000
  • Social Security taxable wage base up from $113,700 to $117,000
  • SIMPLE deferrals remain unchanged at $12,000 (catch-up contributions remain $2,500)

This information is for general and educational purposes and not intended as legal, tax, accounting, securities, or investment advice, or an opinion regarding the appropriateness of any investment, nor a solicitation of any type. Information obtained from third party sources are believed to be reliable, but not guaranteed.

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