Contribution limits for most retirement savings accounts, including 401(k) and individual retirement accounts, will not change in 2017, the IRS announced Thursday as part of its annual cost-of-living adjustments.
The IRS did increase the annual benefit limit for defined benefit plans to $215,000 from $210,000. The defined contribution plan limit increases to $54,000 from $53,000, effective Jan. 1.
The annual compensation limit for qualified retirement plans is increased to $265,000 from $260,000. The definition of a highly compensated employee remains unchanged at $120,000. The limit on premiums paid for qualifying longevity annuity contracts, $125,000, is also unchanged.
The maximum account balance allowed in an employee stock ownership plan subject to a five-year distribution period increases to $1.08 million from $1.07 million, and the dollar amount used to determine the lengthening of the five-year distribution period increases to $215,000 from $210,000.
Employees contributing to defined contribution plans, including 401(k), 403(b), 457 and the federal Thrift Savings Plan, will still have a contribution cap of $18,000, while employees 50 and older can contribute an additional $6,000, the current limit.
For IRA contributions, the current cap of $5,500 stands. The catch-up limit, which is not adjusted for cost of living, remains at $1,000.
The 2017 limitations are available on the IRS website.
Separately, Pension Benefit Guaranty Corp. guarantee limits for single employer plans in 2017 will be 7.1% higher than the ones for the past two years, the agency announced Friday. Multiemployer plan limits, which are not indexed for inflation, remain the same.
A PBGC table on the limits for various ages and forms of payment is on the PBGC website.