Each year, the IRS sets limits for pension plans. These limits are reviewed annually and adjusted for inflation. The following are some important pension limits in effect for 2018:
- Maximum compensation for plan purposes is $275,000
- Maximum monthly benefit for defined benefit plans ages 62 to 65 is the lesser of 100% of compensation or $18,333 with an annual benefit $220,000
- Highly Compensated Employee compensation $120,000+
- Maximum Defined Contribution / Profit Sharing Contribution $55,000
- Maximum SEP Contribution $55,000
- Maximum 401(k) Contribution $18,500. Catch-up Contribution for age 50 and over $6,000
- Maximum SIMPLE Contribution $12,500