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Pension Plan Limits for the Tax Year 2014

On October 31, 2013 the IRS announced cost of living adjustments affecting dollar limitations for pension plans and other retirement-related items for tax year 2014. Some pension limitations such as those governing 401k plans and IRAs will remain unchanged because the increase in the Consumer Price Index did not meet the statutory thresholds for their adjustment. However, other pension plan limitations will increase for 2014.


Chart of Select Limits              
               
401k Plan Limits for Year 2014 2013 2012 2011 2010 2009 2008
401k Elective Deferrals  $17,500 $17,500 $17,000 $16,500 $16,500 $16,500 $15,500
Annual Defined Contribution Limit $52,000 $51,000 $50,000 $49,000 $49,000 $49,000 $46,000
Annual Compensation Limit $260,000 $255,000 $250,000 $245,000 $245,000 $245,000 $230,000
Catch-Up Contribution Limit $5,500 $5,500 $5,500 $5,500 $5,500 $5,500 $5,000
Highly Compensated Employees $115,000 $115,000 $115,000 $110,000 $110,000 $110,000 $105,000
 
Non-401k Related Limits
403(b)/457 Elective Deferrals $17,500 $17,500 $17,000 $16,500 $16,500 $16,500 $15,500
SIMPLE Employee Deferrals $12,000 $12,000 $11,500 $11,500 $11,500 $11,500 $10,500
SIMPLE Catch-Up Deferral $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500
SEP Minimum Compensation $550 $550 $550 $550 $550 $550 $500
SEP Annual Compensation Limit $260,000 $255,000 $250,000 $245,000 $245,000 $245,000 $230,000
Social Security Wage Base $117,000 $113,700 $110,100 $106,800 $106,800 $106,800 $102,000


Download a PDF of this chart.

Highlights of the IRS announcement include the following:

  • The elective deferral (contribution) limit for employees who participate in 401k, 403(b), most 457 plans, and the federal government's Thrift Savings Plan remains unchanged at $17,500.
  • The catch-up contribution limit for employees aged 50 and over who participate in 401k, 403(b), most 457 plans, and the federal government's Thrift Savings Plan remains unchanged at $5,500.
  • The limit on annual contributions to an Individual Retirement Arrangement (IRA) remains unchanged at $5,500. The additional catch-up contribution limit for individuals aged 50 and over is not subject to an annual cost-of-living adjustment and remains $1,000.
  • The deduction for taxpayers making contributions to a traditional IRA is phased out for singles and heads of household who are covered by a workplace retirement plan and have modified adjusted gross incomes (AGI) between $60,000 and $70,000, up from $59,000 and $69,000 in 2013. For married couples filing jointly, in which the spouse who makes the IRA contribution is covered by a workplace retirement plan, the income phase-out range is $96,000 to $116,000, up from $95,000 to $115,000. For an IRA contributor who is not covered by a workplace retirement plan and is married to someone who is covered, the deduction is phased out if the couple's income is between $181,000 and $191,000, up from $178,000 and $188,000. For a married individual filing a separate return who is covered by a workplace retirement plan, the phase-out range is not subject to an annual cost-of-living adjustment and remains $0 to $10,000.
  • The AGI phase-out range for taxpayers making contributions to a Roth IRA is $181,000 to $191,000 for married couples filing jointly, up from $178,000 to $188,000 in 2013. For singles and heads of household, the income phase-out range is $114,000 to $129,000, up from $112,000 to $127,000. For a married individual filing a separate return, the phase-out range is not subject to an annual cost-of-living adjustment and remains $0 to $10,000.
  • The AGI limit for the saver's credit (also known as the retirement savings contribution credit) for low- and moderate-income workers is $60,000 for married couples filing jointly, up from $59,000 in 2013; $45,000 for heads of household, up from $44,250; and $30,000 for married individuals filing separately and for singles, up from $29,500.

The next page contains details on both the unchanged and adjusted limitations for 2014.

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