2018 IRA and Qualified Plan Contribution Limits Update
The IRS recently announced the 2018 cost-of-living adjustment (COLA) increases to contribution limits for IRAs and qualified plans.
Each year, the IRS adjusts these numbers for cost-of-living increases in $500 increments when statutory thresholds are met. Although there were no changes to traditional and Roth IRAs, we did see some increases for defined contribution limits (both elective salary deferral and employer contributions).
Below is a chart that compares the 2017 limits to the 2018 limits.
| 2017 | 2018 | COLA Increases |
|
|---|---|---|---|
| Traditional and Roth IRA Contribution Limits | $5,500 | $5,500 | No Change |
| Traditional and Roth IRA Catch-Up Contributions | $1,000 | $1,000 | No Change |
| SIMPLE IRA Maximum Contributions | $12,500 |
$12,500 | No Change |
| SIMPLE IRA Catch-Up Contributions |
$3,000 | $3,000 | No Change |
| SEP-IRA Contribution Limit | $54,000 | $55,000 | $1,000 |
| 401(k), 403(b), and 457(b) Maximum Elective Deferrals | $18,000 | $18,500 | $500 |
| 401(k), 403(b), and 457(b) Catch-Up Contributions | $6,000 | $6,000 | No Change |
| IRC 415 Defined Contribution Limits |
$54,000 | $55,000 |
$1,000 |
| QLAC | $125,000 | $130,000 |
$5,000 |
For more information on the COLA changes, please visit the IRS website.
Should you have any questions regarding the increase in limits, please feel free to contact the Retirement Strategies Group at (800) 722-2333 or send an e-mail to RSG@PacificLife.com.
Caroline Elrod is a Retirement Strategies Consultant with the Retirement Solutions Division at Pacific Life. She brings several years of industry experience to her role that includes tax planning with insurance products. Caroline enjoys educating financial professionals on creative and practical solutions to business, estate and retirement planning concerns.
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