IRS Announces Pension Plan Contribution Limits for 2018

The IRS has announced Pension Plan limitations for 2018. The changes were made based on the cost of living adjustments. 

Pension plan contributions can be helpful in tax and asset protection planning. 

Contributing to a pension plan can defer taxes on the earnings contributed to the plan or could be used as a tax deduction depending on the type of retirement plan that earnings were contributed to.

Contributing to a pension plan can also offer asset protection. However, the level of protection depends on the type of plan and when the amounts were contributed. 

The highlights of the changes are as follows: 

• The Contribution limit from employees to a 401(k) plan increases from an annual limit of $18,000 to $18,500.
  
• However, the limit to annual contributions to a traditional IRA plan remains at $5,500 and the catch up limit for individuals aged at 50 or older remains at $1,000.  

The details of the changes can be found in IRS Notice 2017-64. 

Notice 2017-64