Retirement Plan Contribution Limits for 2014

The IRS announced, on October 31, 2013, the retirement plan contribution limits for the 2014 tax year.  The limits have pretty much stayed the same, but let’s review some of the most widely used here.

The Roth IRA limit is $5,500 with eligibility phase outs for single filers with modified adjusted gross income of $114,000-$129,000 and married couples filing jointly of $181,000-$191,000. The catch-up contribution limit is $1,000 for those who are 50 or older in calendar 2014.

The traditional IRA limit is $5,500 with deductibility phase out for single filers with modified adjusted gross income of $60,000-$70,000 and covered by an employer retirement plan.  The phase out for married couples filing jointly and the contributor is covered by an employer plan begins at $181,000.  The catch-up contribution limit is $5,500 for those who are 50 or older in calendar 2014.

For a Simplified Employee Pension (SEP) IRA, the company may contribute up to 25% of compensation or $52,000, whichever is less.  This amount is an increase from 2013.  The compensation limit is 20% for sole proprietors.

Salary deferral for SIMPLE IRA’s can be up to $12,000.  There is an employer match limit of 3%.  The catch-up contribution limit is $2,500 for those who are 50 or older in calendar 2014.

The 401(k) employee elective salary deferral limit will be $17,500 with a catch-up contribution limit of $5,500 for those who are 50 or older in calendar 2014.

The rules can be complex so we encourage you to consult your tax advisor. Below is a link to the IRS announcement where you can find more details.

http://www.irs.gov/Retirement-Plans/COLA-Increases-for-Dollar-Limitations-on-Benefits-and-Contributions