Retirement Plan Contribution Limits
New Contribution Limits for Company Retirement Plans
(Including 401(k)s, 403(b)s, and Section 457 and SARSEP Plans) |
| Year | Maximum Contribution | Maximum Contribution
Including Catch-Up Provisions* |
| 2003 | 12,000 | 14,000 |
| 2004 | 13,000 | 16,000 |
| 2005 | 14,000 | 18,000 |
| 2006 | 15,000 | 20,000 |
| 2007 | 15,500 | 20,500 |
| *Those who reach age 50, by the end of the year can contribute an additional $2,000 in 2003, $3,000 in 2004, $4,000 in 2005 and $5,000 in 2006 and each subsequent year. In 2007 Rates and catch-up contribution will be separately adjusted for inflation. |
|
New Traditional IRA and Roth IRA Contribution Limits |
| Year | Maximum Contribution |
Maximum Contribution
Including Catch-Up Provisions* |
| 2003 | 3,000 | 3,500 |
| 2004 | 3,000 | 3,500 |
| 2005 | 4,000 | 4,500 |
| 2006 | 4,000 | 5,000 |
| 2007 | 4,000 | 5,000 |
| 2008 | 5,000 | 6,000 |
| *Those who reach age 50 by the end of the year can contribute an additional $500 in 2003-2005 and an additional $1,000 for 2006 and each subsequent year. In 2009 rates AND catch-up contributions will BOTH be adjusted for inflation. |
| New SIMPLE IRA Contribution Limits for Elective Deferrals |
| Year | Maximum Contribution |
Maximum Contribution
Including Catch-Up Provisions* |
| 2003 | 8,000 | 9,000 |
| 2004 | 9,000 | 10,500 |
| 2005 | 10,000 | 12,000 |
| 2006 | 10,000 | 12,500 |
| The catch up contributions are also eligible for employer matching contributions. |
COMPARED CONTRIBUTION LIMITS
The cost-of-living adjustments (COLA) which apply to dollar limits on contributions and benefits under qualified
plans are based upon increases in the CPI through the 3rd quarter of each year. Based on the 3rd quarter 2001 CPI,
the 2002 limits are expressed below, compared to the 2001 limits through 2008 as follows:
|
Plan |
2003 |
2004 |
2005 |
2006 |
2007 |
2008 |
|
401(k) Elective Deferrals Annual Dollar Limit |
$12,000 |
$13,000 |
$14,000 |
$15,000 |
15,500 |
$15,500 |
|
401(k) Age 50+ Catch-up Contribution |
$2,000 |
$3,000 |
$4,000 |
$5,000 |
$5,000 |
$5,000 |
|
TOTAL
401(k) with Catch-up Contribution |
$14,000 |
$16,000 |
$18,000 |
$20,000 |
$20,500 |
|
| | |
|
|
|
|
|
|
457 Plan Deferral Limit |
$12,000 |
$13,000 |
$14,000 |
$15,000 |
$15,500 |
$15,500 |
|
401(k) Age 50+ Catch-up Contribution |
$2,000 |
$3,000 |
$4,000 |
$5,000 | $5,000 |
$5,000 |
|
TOTAL
457 with Catch-up Contribution |
$14,000 |
$16,000 |
$18,000 |
$20,000 |
$20,500 |
|
| | |
|
|
|
|
|
|
SIMPLE Plan Elective Deferrals Annual Dollar Limit
|
$8,000 |
$9,000 |
$10,000 |
$10,000 |
$10,500 |
$10,500 |
|
SIMPLE Plan Age 50+ Catch-up Contribution
|
$1,000 |
$1,500 |
$2,000 |
$2,500 |
$2,500 |
$2,500 |
|
TOTAL
Simple plan with Catch-up Contribution |
$9,000 |
$10,500 |
$12,000 |
$12,500 |
|
|
| | |
|
|
|
|
|
|
IRA & Roth IRA Elective Deferrals Annual Dollar Limit
|
$3,000 |
$3,000 |
$4,000 |
$4,000 |
$4,000 |
$5,000 |
|
IRA & Roth IRA Age 50+ Catch-up Contribution
|
$500 |
$500 |
$500 |
$1,000 |
$1,000 |
$1,000 |
|
TOTAL
IRA & Roth IRA with Catch-up Contribution |
$3,500 |
$3,500 |
$4,500 |
$5,000 |
$5,000 |
$6,000 |
| | |
|
|
|
|
|
|
Annual Includible Compensation Limit |
$200,000 COLA adj. |
COLA adj. |
COLA adj. |
$220,000 |
$225,000 |
$230,000 |
|
EGTRRA has increased SEP (Simplified Employee Pension) contributions that can be made by self-employed people or for employees of companies who offer SEPs. There was an omission in the EGTRRA that was corrected in the Job Creation and Worker Assistance Act of 2002, signed into law on March 9, 2002.
The 2003 SEP limit is now 25% of compensation up to $200,000.00, but the contribution is limited to $40,000 per year. If you are an employee of a company that offers a SEP at the highest percentage, the 25%, and your income is $200,000, your employer is limited to making a $40,000 contribution to your SEP. If you are self-employed, the effect is to reduce the 25% to the maximum of $40,000 which is only 20% (20% of the $200,000). So effectively the 25% only applies to 160,000, and reduces as you have reached the maximum. |
|
Highly Compensated Employees' Compensation |
$90,000 |
|
|
$100,000 | $100,000 |
$105,000 |
|
Defined Contribution Plan Annual Addition Limit
|
$40,000
Index for inflation |
|
|
$44,000 | $45,000 |
$46,000 |
|
Defined Benefit Pension Plan Annual Benefit Limit
|
$160,000
COLA adj. |
|
|
$175,000 | $180,000 |
$185,000 |
Social Security Wage Base |
$87.000 |
|
|
$94,200 | $97,500 | . |
NOTE:
ALL information contained in this site is for illustration purposes only, and by NO means should be considered individual tax or legal advice under any circumstances whatsoever!
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First Allies Securities, Inc. Member NASD/
SIPC
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All rights reserved
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