On October 31, 2013, the IRS announced cost-of-living adjustments for 2014 retirement plan contributions. For 2014, the amounts that individuals will be able to contribute to retirement plans will remain the same as 2013. Highlights of the IRS announcement include:
- Continuing the annual salary deferral limit for 401(k), 403(b), and most 457 plans at $17,500.
- Leaving unchanged the additional catch-up contribution for employees age 50 and older at $5,500.
- Increasing the limit on total contributions to defined contribution plans from $51,000 to $52,000.
- Leaving unchanged the definition of highly compensated employee as an employee making $115,000 per year.
- Increasing the amount of compensation that can be taken into consideration for retirement plan contributions from $255,000 to $260,000.
- Keeping the annual contribution limit to individual retirement accounts (IRAs) at $5,500, and the IRA catch-up contribution for those age 50 and older at $1,000.
The Social Security Administration earlier announced that the Social Security Wage Base for 2014 will increase to $117,000 from $113,700.
