On October 23, 2014, the Internal Revenue Service announced cost of living adjustments (COLA) for the 2015 tax year for pension plans and other retirement-related items. While many plan limits will see an increase due to rise in the cost-of-living index, some limits will remain unchanged because statutory price-increase thresholds were not met, or the limit is set by statute and not subject to an annual COLA.
Here are the highlights of the adjustment to take effect on January 1, 2015:
- The elective deferral limit for employees is increased from $17,500 to $18,000.
- The catch-up contribution limit for employees aged 50 and over is increased from $5,500 to $6,000.
- The limitation for defined contributions plans is increased from $52,000 to $53,000.
- The annual compensation limit is increased from $260,000 to $265,000.
- The limitation used in the definition of highly compensated employee is increased from $115,000 to $120,000.
For a complete rundown of the new, as well as historical limits, click here.
If you would like to make any changes to your plan or discuss further opportunities to fit your retirement goals, please call J.Freeman & Associates at 864-331-4400 or email Investments@J-Freeman.com.