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2014 401(k) and Pension Plan Limits

  • 401(k), 403(b) and profit-sharing plan elective deferrals in 2014 will remain at $17,500; the catch-up contribution limit will stay 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 in calculating contributions to defined contribution plans will increase to $260,000 from $255,000.
  • The limit used in the definition of a highly compensated employee for the purpose of 401(k) nondiscrimination testing remains unchanged at $115,000.

Defined Contribution Plan Limits
For 401(k), 403(b) and most 457 plans, the COLA increases for dollar limits on benefits and contributions are as follows:

2014

2013

Maximum elective deferral by employee

$         17,500

$          17,500

Catch-up contribution (age 50 and older during 2012)

5,500

5,500

Defined contribution maximum deferral (employer and employee combined)

52,000

51,000

Employee annual compensation limit for calculating contributions

260,000

255,000

Annual compensation of “key employees” in a top-heavy plan

170,000

165,000

Annual compensation of “highly compensated employee” in a top-heavy plan (“HCE threshold”)

$       115,000

$       115,000

Other Workplace Retirement Plan Limits

Non-401(k) Workplace Retirement Plan Limits

2014

2013

SIMPLE employee deferrals

$         12,000

$       12,000

SIMPLE catch-up deferrals

2,500

2,500

SEP minimum compensation

550

550

SEP annual compensation limit

260,000

255,000

Social Security wage base

$       117,000

$     113,700

Individual Retirement Accounts

  • The limit on annual contributions to an individual retirement account (IRA) will stay at $5,500. The additional catch-up contribution limit for those ages 50 and over will remain $1,000.
  • The deduction for taxpayers making contributions to a traditional IRA has been phased out for singles and heads of household who are covered by a workplace retirement plan and have modified adjusted gross incomes (AGIs) from $60,000 to $70,000, up from $59,000 to $69,000 in 2013.
  • For married couples filing jointly, in which the spouse who makes the IRA contribution is covered by a workplace retirement plan, the AGI phase-out range will be $96,000 to $116,000, up from $95,000 to $115,000.
  • For an IRA contributor who is not covered by a workplace retirement plan and is married to someone who is covered, the deduction has been phased out for couples with an AGI from $181,000 to $191,000, up from $178,000 to $188,000.
  • For a married individual filing a separate return who is covered by a workplace retirement plan, the phase-out range is not subject to an annual cost-of-living adjustment and will remain $0 to $10,000.
  • For a Roth IRA, the AGI phase-out range for taxpayers making contributions will be $181,000 to $191,000 for married couples filing jointly, up from $178,000 to $188,000 in 2013. For singles and heads of household, the income phase-out range will be $114,000 to $129,000, up from $112,000 to $127,000. For a married individual filing a separate return who is covered by a retirement plan at work, the phase-out range will remain $0 to $10,000.
  • The AGI limit for the saver’s credit (also known as the retirement savings contributions credit) for low- and moderate-income workers will rise to $60,000 for married couples filing jointly, up from $59,500 in 2013; $45,050 for heads of household, up from $44,250; and $30,000 for singles and married couples filing separately, up from $29,500.