Locke Lord QuickStudy: IRS Announces 2017 Retirement Plan Limitations – Most Limits Remain Unchanged

    Locke Lord Publications

    The Internal Revenue Service announced the 2017 cost-of-living adjustments to the dollar limitations for qualified retirement plans and other benefits, and the Social Security Administration announced its own cost-of-living adjustments for 2017. The elective deferral contribution limit for 401(k), 403(b) and 457(b) plans, as well as the catch-up contribution limit, remain unchanged from 2016. Other limits, such as the annual compensation limit under 401(a)(17), the limit used in the definition of key employee and the maximum annual contribution limit under Code Section 415, will increase in 2017.

    Retirement Plan Limits and Social Security Wage Base
      2017 Limits   2016 Limits 
    401(k)/403(b)/457(b) Elective Deferrals   $18,000  $18,000
    Catch-Up Contribution (plans other than SIMPLE plans)  $6,000  $6,000
    SIMPLE Plan Employee Deferrals  $12,500  $12,500
    SIMPLE Plan Catch-Up Contributions  $3,000  $3,000
    Plan Maximum Annual Contribution – Defined
    Contribution Plans (Section 415(c))
     $54,000  $53,000
    Maximum Annual Benefit – Defined Benefit
    Plans (Section 415(b))
     $215,000  $210,000
    Compensation Limit under Section 401(a)(17)   $270,000  $265,000
    Highly Compensated Employee Definition under Section 414(q)  $120,000  $120,000
    Key Employees Officer Compensation for Top-Heavy Plans
     $175,000  $170,000
    Maximum ESOP Account Balance Subject to 5-Year Distribution Period   $1,080,000  $1,070,000
    Social Security (FICA) Wage Base   $127,200  $118,500

    Health Savings Account and High Deductible Health Plan Limits
    Earlier this year, the IRS announced the inflation-adjusted amounts for health savings account and high-deductible health plans for 2017. The HSA limit for self-only coverage will increase to $3,400 for 2017 but the limit will remain $6,750 for individuals with family coverage. The minimum annual deductible and maximum annual out-of-pocket expense limits for high deductible health plans for both self-only and family coverage remain unchanged from 2016.

    Health Savings Accounts/HDHP Limits
      2017 Limits  2016 Limits 
    HSA Contribution -- Annual Contribution Limit     
    Self-Only Coverage  $3,400
    Family Coverage  $6,750
    Catch-Up Contributions (age 55 or older)  $1,000  $1,000
    High Deductible Health Plan – Minimum Annual
    Self-Only Coverage  $1,300  $1,300
    Family Coverage  $2,600  $2,600
    High Deductible Health Plan – Maximum Out of Pocket
    Self-Only Coverage  $6,550  $6,550
    Family Coverage  $13,100  $13,100

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