2017 Cost-of-Living Changes

The IRS has released 2017 cost-of-living adjustments (COLAs) for various retirement plan limitations, with some limitations increasing and others remaining at their 2016 levels. Changes include the following:

• Annual additions limit for defined contribution plans increased from $53,000 to $54,000
• Maximum annual benefit limit under a defined benefit plan increased from $210,000 to $215,000
• Annual compensation limit used to determine qualified plan benefits or contributions increased from $265,000 to $270,000
• Compensation limit used in determining whether officers are key employees for top-heavy plan purposes increased from $170,000 to $175,000

The following limitations remain unchanged:

• Elective deferrals to 401(k), 403(b), and most 457 plans: $18,000
• Catch-up contributions to 401(k), 403(b), and most 457 plans: $6,000
• SIMPLE plan deferrals: $12,500
• SIMPLE plan catch-up contributions: $3,000
• Dollar limit used in the definition of highly compensated employee: $120,000
• Individual retirement account (IRA) contributions: $5,500

IRA catch-up contributions: $1,000