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October 23, 2014 at 09:49 AM
Contribution limits for employees in 401(k), 403(b), most 457 plans and the federal government’s Thrift Savings Plan will increase from $17,500 to $18,000 next year, the IRS announced Thursday.
The catch-up contribution limit for employees aged 50 and over who participate in 401(k), 403(b), most 457 plans, and the TSP will go from $5,500 to $6,000.
The limit on annual contributions to an 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 limit on maximum contributions to a defined contribution plan, including the employer’s match, will be raised to $53,000 in 2015, up from $52,000.
Also, the amount of employee compensation that can be considered in calculating pension benefits and contributions to defined contribution plans will rise to $265,000 from $260,000.
Contribution limits are tied to inflation and are reviewed each year. Last year, the Consumer Price Index had not climbed enough to trigger an increase in 401(k) and IRA limits.
