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2017 Annual Qualified Retirement Plan Contribution Limits

Oct 24, 2016 | Everything Else, Individuals, Institutions, Limits, Plan Sponsors

2017 Qualified Plan Adjustments

On October 27, 2016, the Internal Revenue Service announced1 cost of living adjustments affecting dollar limitations for pension plans and other retirement related items for Tax Year 2017. Generally speaking, many of the pension plan limitations do not change for 2017 because the rise in the cost-of-living index does not meet the statutory thresholds that trigger their adjustment.

The following is a comparison of the 2016 and 2017 annual limits:

Y2016 Y2017
Limit on Elective Deferrals IRC §402(g)(1) $18,000 $18,000
Highly Compensated Employee Annual Income IRC §414(q)(1)(B) $120,000 $120,000
Defined Benefit Plan IRC §415 (b)(1)(A) Benefit Limit $210,000 $215,000
Defined Contribution Plan IRC §415(C)(1)(A) Dollar Limit $53,000 $54,000
Annual Compensation Limit §§401(a)(17), 404(l), 408(k)(3)(C),408(k)(6)(D)(ii) $265,000 $270,000
Catch-up Contributions Limit for Workers Aged 50 or Older §414(v)(2)(B)(i) $6,000 $6,000
Key Employee Top Heavy Limit §416(i)(1)(A)(i) $170,000 $175,000
IRAs  for Individuals < 50 $5,500 $5,500
IRAs  for individuals >49 $6,500 $6,500
SIMPLE Retirement Accounts 408(p)(2)(E) $12,500 $12,500

2017 Social Security Adjustments

On October 19, 2016, the Social Security Administration announced2 that there is a 0.3% in the cost of living adjustment (“COLA”). The Social Security COLA is 0% for 2016 and 1.7% for 2015. For 2017:

  • The Social Security Taxable wage base will be $127,200 from $118,500
  • The FICA tax (OASDI and Medicare) payable by both employees and employers remains 7.65% up to the taxable wage base and 15.30% for self- employed.
  • The 1.45% Medicare tax continues to apply to all earnings.
  • An additional 0.9% of Medicare Tax applies to individuals with earned income of more than $200,000 ($250,000 for married couples filing jointly).
  • The Social Security (OASDI) tax, assessed up to the taxable wage base, remains 6.2% for employers and 6.2% for employees.
  1. www.irs.gov/pub/irs-drop/n-16-62.pdf
  2. www.ssa.gov/news/press/factsheets/colafacts2017.pdf