Retirement Planning Key Numbers-2014

Certain retirement plan and IRA limits are indexed for inflation each year, and many of the limits eligible for a cost-of-living adjustment (COLA) have increased for 2014. Some of the key numbers for 2014 are listed below, with the corresponding limit for 2013. (The source for these 2014 numbers is IRS Information Release IR-2013-86.)

Elective deferral limits

2013

2014

401(k)   plans, 403(b) plans, 457(b) plans, and SAR-SEPs1 (includes Roth   contributions) Lesser of $17,500 or 100% of participant’s compensation   ($23,000 if age 50 or older) 2 Lesser of $17,500 or 100% of participant’s compensation   ($23,000 if age 50 or older) 2
SIMPLE   401(k) plans and SIMPLE IRA plans1 Lesser of $12,000 or 100% of participant’s compensation   ($14,500 if age 50 or older) Lesser of $12,000 or 100% of participant’s compensation (   $14,500 if age 50 or older )

IRA contribution limits

2013

2014

Traditional   and Roth IRAs Lesser of $5,500 or 100% of earned income ($6,500 if age 50   or older) Lesser of $5,500 or 100% of earned income ($6,500 if age 50   or older)

Defined benefit plan annual benefit   limits

2013

2014

Annual   benefit limit per participant Lesser of $205,000 or 100% of average compensation for   highest three consecutive years Lesser of $210,000 or 100% of average compensation for   highest three consecutive years

Defined contribution plan limits (   qualified plans, 403(b) plans, and SEP plans)

2013

2014

Annual addition limit per   participant (employer contributions; employeepretax,   after-tax, and Roth contributions; and forfeitures) Lesser of $51,000 or 100%   (25%for SEP) of participant’scompensation Lesser of $52,000 or 100%   (25%for SEP) of participant’s

compensation

 

1  Must aggregate employee deferrals to all 401(k), 403(b), SAR-SEP, and SIMPLE plans of all employers; 457(b)  contributions are not aggregated. For SAR-SEPs, the percentage limit is 25% of compensation reduced by elective deferrals (effectively a 20% maximum contribution).

2  Special catch-up limits may also apply to 403(b) and 457(b) plan participants.

Retirement plan compensation limits

2013

2014

Maximum compensation perparticipant that can be used to calculate tax-deductible employer contribution (qualified plans/SEPs) $255,000 $260,000
Compensation threshold used to determine a highly compensated employee $115,000 (when 2013 is the look-back year) $115,000 (when 2014 is the look-back year)
Compensation threshold used to determine a key employee in a top-heavy plan $1 for more-than-5% owners$165,000 for officers$150,000 for more-than-1% owners $1 for more-than-5% owners$170,000 for officers

$150,000 for more-than-1% owners

Compensation threshold used to determine a qualifying employee under a SIMPLE plan $5,000 $5,000
Compensation threshold used to determine a qualifying employee under a SEP plan $550 $550

Income phaseout range for determining deductibility of traditional IRA contributions for taxpayers:

2013

2014

1 . Covered by an employer-sponsored plan and filing as:    
Single/Head of household $59,000 – $69,000 $60,000 – $70,000
Married filing jointly $95,000 – $115,000 $96,000 – $116,000
Married filing separately $0 – $10,000 $0 – $10,000
2. Not covered by an employer-sponsored retirementplan, but filing joint return with a spouse who is covered by a plan $178,000 – $188,000 $181,000 – $191,000

Income phaseout range for determining ability to fund a Roth IRA for taxpayers filing as:

2013

2014

     
Single/Head of household $112,000 – $127,000 $114,000 – $129,000
Married filing jointly $178,000 – $188,000 $181,000 – $191,000
Married filing separately $0 – $10,000 $0 – $10,000

 

IMPORTANT DISCLOSURES
Broadridge Investor Communication Solutions, Inc. does not provide investment, tax, or legal advice. The information presented here is not specific to any individual’s personal circumstances.
To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law. Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances.
These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable—we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice.

 

 

 

 

 

About Sara Seasholtz

Sara Seasholtz, CFP®, was voted one of "50 Most Influential Women in Charlotte" by The Mecklenburg Times in 2011, and she's been a trusted financial advisor to her clients for over 30 years. Have a financial question?ASK SARA!

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