Benefits & Compensation News

Better late than never: 2014 retirement contribution limits from the IRS

After a short delay resulting from the government shutdown, the IRS just announced the 2014 contribution limits for 401k plans and individual retirement accounts (IRAs).

Most of the 2014 limits aren’t good for anyone hoping to increase their retirement plan — or catch-up — contributions.

The IRS said that inflation, as measured by the Consumer Price Index, didn’t increase enough over the past year to justify raising many of the limits.

As a result, here’s where the notable retirement plan limits stand for 2014:

  • 401K, 403b and 457 plan contributions will remain capped at $17,500
  • Catch-up contributions for the plans listed above will remain capped at $5,500
  • The annual defined contribution limit from all sources will rise to $52,000 (from $51,000)
  • The amount of employee compensation that can be considered when calculating contributions to defined contribution plans increases to $260,000 (from $255,000)
  • The limit on annual IRA contributions remains capped at $5,500
  • The IRA catch-up contribution limit (which is not tied to inflation) remains $1,000
  • The limitation on the annual benefit under a defined benefit plan will increase from $205,000 to $210,000, and
  • The earning threshold used to define a highly compensated employee will remain $115,000.

More info: The IRS also listed other inflation-adjusted  tax items it feels are of the greatest interest to individual tax payers.

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