|Type of Limitation||2017||2016||2015||2014|
|Elective Deferral Limit 401(k) and 403(b) Plans||$18,000||$18,000||$18,000||$17,500|
|Catch-Up Contribution Limit 401(k) and 403(b) Plans)||$6,000||$6,000||$6,000||$5,500|
|Elective Deferral Limit (SIMPLE Plans)||$12,500||$12,500||$12,500||$12,000|
|Catch-Up Contribution Limit (SIMPLE Plans)||$3,000||$3,000||$3,000||$2,500|
|Defined Benefit Plan Limit||$215,000||$210,000||$210,000||$210,000|
|Defined Contribution Plan Limit||$54,000||$53,000||$53,000||$52,000|
|Annual Compensation Limit||$270,000||$265,000||$265,000||$260,000|
|Key Employee Threshold||$175,000||$170,000||$170,000||$170,000|
|Highly Compensated Employee Threshold||$120,000||$120,000||$120,000||$115,000|
|IRA Contribution Limit||$5,500||$5,500||$5,500||$5,500|
|IRA Catch-Up Contribution Limit||$1,000||$1,000||$1,000||$1,000|
|SEP Minimum Compensation||$600||$600||$600||$550|
|SEP Maximum Compensation||$270,000||$265,000||$265,000||$255,000|
|Income Subject to Social Security Tax||$127,200||$118,500||$118,500||$117,000|
The maximum amount a person can contribute to his or her is set each year by the IRS after taking inflation into account. For the year 2017, people can contribute up to $18,000 as an elective deferral to their employer's 401(k) plan. Additionally, if you are age 50 or older, you can contribute an additional catch-up contribution of $6,000.
The 401(k) limit applies to all 401(k) accounts you might have for the current year. If you work at two or more jobs or switch jobs in the middle of the year, then you may need to track your 401(k) contributions yourself to ensure that you don't contribute over the limit.
For people who plan to contribute the maximum allowed, it may be easiest to break the annual limit into equal dollar amounts per pay period. That way, you'll be saving the same amount each pay period and will be dollar-cost-averaging into your retirement investments.
Elective deferrals are treated separately from the employer's matching contributions. Elective salary deferrals can be placed into a tax-deferred traditional 401(k) or into a post-tax Roth 401(k) account, or a combination of traditional and Roth as long as the total of all salary deferrals are equal to or less than the annual maximum. Matching contributions from the employer are limited to 25% of your salary (or 20% of your net self-employment income if you are self-employed). Matching funds are always contributed to the tax-deferred portion of your 401(k) plan. The total of your elective salary deferral plus employer matching contributions is limited to $54,000 for the year 2017.
If you have any questions regarding annual contributions, please complete the form and a TRA representative will be in contact with you.