The Internal Revenue Service and the Social Security Administration announced the cost-of-living adjustments affecting limitations for qualified retirement plans and IRAs for 2017. Overall, the limitations remain flat because inflation is low.
IRS Notice 2016-62 sets forth the annual dollar limitations effective Jan. 1, 2017, as required under Section 415(d) of the Internal Revenue Code. Employees will be able to continue to defer up to $18,000 into their qualified defined contribution plans, and an additional $6,000 for those over the age of 50, for a combined total of $24,000. The Consumer Price Index for All Urban Consumers is the benchmark used to determine the index and did not have the increases needed to trigger many adjustments for 2017. As a result, some of the 2017 dollar limits will again remain unchanged as noted in the chart below and a few limits will increase, most notably the annual addition limit for defined contribution plans increases to $54,000.
Employers and plan sponsors of qualified retirement plans should communicate these limits for 2017 to plan participants.