Late last week the IRS announced the 2018 cost of living adjustments to various limits impacting retirement plan and IRA saving opportunities.
In general terms, plan sponsors will include slightly more compensation paid to highly paid employees, and employees will be able to contribute slightly more. Here are a few of the increases most likely to impact your employees:
- the contribution limit for defined contribution plans (including 401(k) and 403(b) plans) increases from $18,000 to $18,500;
- the limitation on the total amount that may be contributed to a defined contribution plan increases from $54,000 to $55,000;
- the limit on the amount of includible compensation increases from $270,000 to $275,000;
- the limitation on the annual benefit under a defined plan increases from $215,000 to $220,000;
- the income phase-out range for taxpayers making contributions to a Roth IRA increases by $2,000 for singles and heads of households (from $120,000-$135,000 up to $122,000-$137,000) and by $3,000 for married couples filing jointly (from $186,000-$196,000 up to $189,000-$199,000); and
- the income limit for the Saver’s Credit for low- and moderate-income workers increases by $1,000, $750, and $500 for married couples filing jointly, heads of household, and singles and separately filing married individuals, respectively.
Matthew loves to write. He also loves to think, though he’s probably a better writer than a thinker. He does not like to be on camera or in videos. This blog will allow him to write, challenge his ability to think, and, from time to time, test him with video blog entries.
He has a unique blend of legal and practical experience that helps us to serve our clients well. On the one hand, he has more than 12 years of private legal practice experience focusing exclusively on employee benefits, including time as a partner in an employee benefits boutique where he has represented clients in front of the DOL and IRS. On the other hand, he holds his FINRA Series 7 and 66 registrations and serves as the Director of ERISA Services for Qualified Plan Advisors.
Matthew likes to stay active. He provides fiduciary training, Investment Policy Statement design, and vendor oversight to our clients. He is an active member of the Employee Benefits Committee of the American Bar Association Tax Section, serving as Chair of the Defined Contribution Plans Subcommittee. He also has been appointed to the IRS TE/GE Gulf States Council and is a frequent speaker on regulatory developments, fiduciary responsibilities, and retirement readiness.
Most importantly, he stays active with his family. His wife, Laura, is the founder of REbeL, Inc., a not-for-profit organization. His three young boys are mixed up in far too many sports, and they enjoy traveling, watching college football, running with Dad, and rooting for the Huskers.
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