IRS Announces 2014 Pension Plan Amounts

Saving for retirement is critical because it allows you to accumulate wealth for the future and generally provides a tax break.

The Internal Revenue Code provides dollar limitations on benefits and contributions of qualified retirement plans. It also requires the IRS to adjust these limits for cost‑of‑living increases on an annual basis.

The IRS announced the pension plan limitation changes for 2014.

Some pension limitations remain unchanged "because the increase in the Consumer Price Index did not meet the statutory thresholds for their adjustments," the IRS explained. However, other limits will increase for 2014.

Below are some of the key amounts:

Annual Qualified Plan Limits	2014	2013
401(k), SARSEP, 403(b) Plan Deferrals (Section 402(g)) & 457 Plan deferrals (Section 457(b)(2))	$17,500	$17,500
401(k), 403(b), 457 & SARSEP additional "catch-up" contributions for employees age 50 and older	$5,500	$5,500
Defined contribution plan dollar limit on additions (Section 415(c)(1)(A))	$52,000	$51,000
Defined benefit plan limit on benefits (Section 415(b)(1)(A))	$210,000	$205,000
Maximum compensation used to determine contributions	$260,000	$255,000
SIMPLE deferrals (Section 408(p)(2)(A))	$12,000	$12,000
SIMPLE additional "catch-up" contributions for employees age 50 and older	$2,500	$2,500
Compensation defining highly compensated employee (Section 414(q)(1)(B))	$115,000	$115,000
Compensation defining key employee (officer)	$170,000	$165,000
The compensation amounts under Section 1.61‑21(f)(5)(i) of the Income Tax Regulations concerning the definition of "control employee" for fringe benefit valuation purposes	$105,000	$100,000
Compensation triggering Simplified Employee Pension (SEP) contribution requirement (Section 408(k)(2)(c))	$550	$550
IRAs	2014	2013
Traditional and Roth IRA Individual, up to 100% of earned Income	$5,500	$5,500
Roth and traditional IRA additional annual "catch-up" contributions for account owners age 50 and older	$1,000	$1,000