The Internal Revenue Service (IRS) just published retirement plan contribution limits for the upcoming year. Here are the highlights:
Contribution and Compensation Limits
- 401(k), 403(b) and 457(b) employee salary deferrals remain unchanged at $19,500
- 401(k) and 403(b) catch-up contributions for age 50 and over remain unchanged at $6,500
- Annual addition limit increases to $58,000 from $57,000
- Annual compensation limit increases to $290,000 from $285,000
Testing Limits
- Compensation to determine highly compensated employee remains unchanged at $130,000
- Key employee based on officer status remains unchanged at $185,000
- Key employee based on 1 percent owner compensation remains unchanged at $150,000
Next Step
Payroll providers, recordkeepers and TPAs will update their platforms in the upcoming days. In the meantime, plan sponsors may want to send a memo to their employees as a heads up on the contribution limits for next year. At NESA, we will also review these contribution limits with our clients at the Annual Fiduciary Meeting to ensure that our clients continue to meet their goals and objectives.
How can NESA 401(k) and 403(b) Experts help?
