Cost of Living Adjustment (COLA) Information

IRS Limits on Benefits and Compensation - IRS 10/26/2020

Cost of Living Adjustment (COLA) Information

IRS Limits on Benefits and Compensation - IRS 10/26/2020
Defined Contribution – Annual Additions
$ 58,000
$ 57,000
$ 56,000
Defined Benefit – Annual Benefit
230,000
230,000
225,000
Annual Compensation
290,000
285,000
280,000
Deferrals-401(k)* 403(b) *457(b)*SARSEP
19,500
19,500
19,000
Catch-Up-401(k)* 403(b) *457(b)*SARSEP
6,500
6,500
6,000
Deferrals-SIMPLE
13,500
13,500
13,000
Catch-Up-SIMPLE
3,000
3,000
3,000
Highly Compensated Employee
130,000
130,000
125,000
Key Employee-Officer
185,000
185,000
180,000
Qualifying Longevity Annuity Contract (QLAC)
135,000
135,000
130,000
Social Security Taxable Wage Base
142,800
137,700
132,900
Limitation Descriptions:

Compensation – Maximum amount of compensation that may be used for retirement plan purposes (contribution allocations, benefit accruals, testing, etc.)

HCE (Highly Compensated Employee) Compensation – Amount of compensation earned in the look-back year to deem that individual highly compensated for the current plan year

Key/Officer – Amount of compensation earned by an officer of a business to deem that individual a Key employee for top heavy purposes

SSTWB (Social Security Taxable Wage Base) – Maximum earned gross income on which Social Security taxes (other than Medicare) are imposed

401(k) / 457 / 403(b) Deferrals –Maximum amount an individual may defer on a pre-tax (or Roth) basis to a 401(k), 457 or 403(b) plan for the calendar year

Catch-Up Deferrals – Maximum amount an individual (age 50 or more by end of the calendar year) may defer over the normal deferral limits above

Annual Additions – Maximum amount an individual may have allocated to their account in a defined contribution retirement plan (including employee deferrals, employer contributions and forfeiture reallocations)

Annual Benefit – Maximum amount an individual can receive in a defined benefit plan calculated as an annual benefit at retirement

SIMPLE Deferrals – Maximum amount an individual may defer to a SIMPLE 401(k) plan or IRA

SIMPLE Catch-Up – Maximum amount an individual (age 50 or more by end of the calendar year) may defer over the normal SIMPLE deferral limits above