401(k) retirement plan contribution limit increases for
This article organizes the original guidance on 401(k) retirement plan contribution limit increases for 2018; most other limits are stagnant into clear sections for easier reading and reference.
Overview
This opening section presents the main context from the original post.
Retirement plan contribution limits are indexed for inflation, but with inflation remaining low, most of the limits remain unchanged for 2018. But one piece of good news for taxpayers who are already maxing out their contributions is that the 401(k) limit has gone up by $500.
The only other limit that has increased from the 2017 level is for contributions to defined contribution plans, which has gone up by $1,000.
- Type of limit — 2018 limit
- Elective deferrals to 401(k), 403(b), 457(b)(2) and 457(c)(1) plans — $18,500
- Contributions to defined contribution plans — $55,000
- Contributions to SIMPLEs — $12,500
- Contributions to IRAs — $5,500
- Catch-up contributions to 401(k), 403(b), 457(b)(2) and 457(c)(1) plans — $6,000
- Catch-up contributions to SIMPLEs — $3,000
- Catch-up contributions to IRAs — $1,000
If you are not already maxing out your contributions to other plans, you still have an opportunity to save more in 2018. And if you turn age 50 in 2018, you can begin to take advantage of catch-up contributions.
Higher-income taxpayers should also be pleased that some limits on their retirement plan contributions that had been discussed as part of tax reform didn’t make it into the final legislation.
However, keep in mind that there are still additional factors that may affect how much you are allowed to contribute (or how much your employer can contribute on your behalf). For example, income-based limits may reduce or eliminate your ability to make Roth IRA contributions or to make deductible traditional IRA contributions.
If you have questions about how much you can contribute to tax-advantaged retirement plans in 2018, check with us.
Related Resources
These resources connect the article topic with related Bowers service pages and approved professional reading.
FAQ
The questions below summarize the main points already covered in the article.
What is the main focus of 401(k) retirement plan contribution limit increases for 2018; most other limits are stagnant?
The article focuses on 401(k) retirement plan contribution limit increases for 2018; most other limits are stagnant and organizes the original guidance into sections for easier review.
Does the post include action items or reminders?
Yes. The original post includes listed items that have been kept in list format for easier scanning.
Was the original post wording changed?
The revision keeps the author wording and updates the structure so the post is easier to read online.