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401K Contribution Limits for 2018

Each year the IRS publishes updated Maximum 401K contribution limits, as well as catch-up contribution limits for the new year. Typically, the limits the IRS sets each year is based on inflation factors (with minimum $500 increases), so they do not necessarily increase the limit each year.

The 401K Max Contribution Limit for 2018 has now been set, with a $500 increases over 2017 to $18,500. The Maximum 401K contribution Limit for 2016 and 2017 was $18,000 and $18,000, respectively (there was no increase in 2017).

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Don’t Buy-and-Forget the Investments in Your 401K Plan

IRA Contribution Limits 2017 and Previous Years

Social Security Cost of Living Adjustments for 2018

As you can see, the Maximum 401K contribution limits do not rise dramatically each year. Although over time, if investors are diligent about increasing their contributions, it can certainly make a difference. The limit on contributions for 401K, 403B, most 457 plans, and the Federal Government Thrift Savings Plan (TSP):

  • 2018 – $18,500
  • 2017 – $18,000
  • 2016 – $18,000
  • 2015 – $18,000
  • 2014 – $17,500
  • 2013 – $17,500
  • 2012 – $17,000
  • 2011 – $16,500
  • 2010 – $16,500
  • 2009 – $16,500
  • 2008 – $15,500

For those of you that are over age 50 (or turn age 50 before the end of the year), you are allowed an additional 401K catch-up contribution. These limits also adjust for inflation, but at a much slower pace. The $500 increase to $6,000 for 2015 was the first 401K catch up increase since 2009. For 2018, there is NO increase:

  • 2018 – $6,000
  • 2017 – $6,000
  • 2016 – $6,000
  • 2015 – $6,000
  • 2014 – $5,500
  • 2013 – $5,500
  • 2012 – $5,500
  • 2011 – $5,500
  • 2010 – $5,500
  • 2009 – $5,500
  • 2008 – $5,000

READ: Social Security Leveling Option

In addition to total allowable employee 401K contributions, there is a maximum total contribution allowed into your 401K (when factoring in employer match). For 2018, the maximum allowed to be contributed into your 401K has increased from $54,000 to $55,000 (or 100% of income, whichever is greater) with minimum $1,000 increases thereafter. Therefore, with employee standard contributions, potential over-50 “catch-up” contributions, plus employer contributions, the maximum overall contributions are $61,000 in 2017.

For IRS Limits on Other Types of Retirement Plans (ie. SIMPLE, SEP, etc.), please see IRS Retirement Plans Guide

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About Robert Henderson and Lansdowne Wealth Management

Robert Henderson is the President of Lansdowne Wealth Management, an independent, fee-only advisory firm in Mystic, CT. His firm specializes in financial planning and investment management for retirement, with a special focus on the particular needs of women that are divorced or widowed. He is an Accredited Asset Management Specialist and a Certified Divorce Financial Analyst. Mr. Henderson can be reached at 860-245-5078 or bhenderson@lwmwealth.com. You can also view his personal finance blog, The Retirement Workshop at http://lwmwealth.com/blog and the firm’s website at http://www.lwmwealth.com.

If you are an employee or retiree of General Dynamics, and you would like advice and direction on retirement planning or managing your GD Fidelity 401K plan, please sign up for our monthly newsletter, which provides complimentary ongoing advice, commentary, and model portfolios for those plans.

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