(Editor’s Note: This advisory has been updated with new information. Please see addendum below.)
The Internal Revenue Service has announced the 2018 cost of living adjustments to various limits. The adjusted amounts generally apply for plan years beginning in 2018. Some of the adjusted amounts, however, apply to calendar year 2018.
Employee Benefit Plans
| Plan Year | 2018 | 2017 |
| 401(k), 403(b), 457 deferral limit | $18,500 | $18,000 |
| Catch-up contribution limit (age 50 or older by end of 2017) | $6,000 | $6,000 |
| Annual compensation limit | $275,000 | $270,000 |
| Annual benefits payable under defined benefit plans | $220,000 | $215,000 |
| Annual allocations to accounts in defined contribution plans | $55,000 (but not more than 100% of compensation) | $54,000 (but not more than 100% of compensation) |
| Highly compensated employee | Compensation more than $120,000 in 2017 plan year | Compensation more than $120,000 in 2016 plan year |
Health Savings Accounts
| Calendar Year | 2018 | 2017 |
| Maximum contribution | ||
| Family Self | $6,850 $3,450 | $6,750 $3,400 |
| Catch-up contribution (participants who are 55 by end of year) | $1,000 | $1,000 |
| Minimum deductible | ||
| Family Self | $2,700 $1,350 | $2,600 $1,300 |
| Maximum out-of-pocket | ||
| Family Self | $13,300 $6,650 | $13,100 $6,550 |
Social Security
| Calendar Year | 2018 | 2017 |
| Taxable wage base | $128,400 | $127,200 |
| Maximum earnings without loss of benefits | ||
| Under full retirement age Year you reach full retirement age | $1,420/mo. ($17,040/yr.) $3,780/mo. up to mo. of full retirement age ($45,360/yr.) | $1,410/mo. ($16,920/yr.) $3,740/mo. up to mo. of full retirement age ($44,880/yr.) |
Social Security Retirement Age
| Year of Birth | Retirement Age |
| Prior to 1938 | Age 65 |
| 1938 | 65 and 2 months |
| 1939 | 65 and 4 months |
| 1940 | 65 and 6 months |
| 1941 | 65 and 8 months |
| 1942 | 65 and 10 months |
| 1943 – 1954 | 66 |
| 1955 | 66 and 2 months |
| 1956 | 66 and 4 months |
| 1957 | 66 and 6 months |
| 1958 | 66 and 8 months |
| 1959 | 66 and 10 months |
| 1960 and later | 67 |
UPDATE – March 6, 2018: The IRS has lowered the HSA maximum family contribution to $6,850 (from $6,900). The table above has been updated to reflect this change.
UPDATE – December 4, 2017: The Social Security Administration (SSA) typically announces adjustments in October that take effect the following January, based on the increase in average wages. Based on the wage data SSA had at the time of the October 2017 announcement, the maximum amount of earnings subject to the Social Security tax (taxable maximum) was to increase to $128,700 in 2018, from $127,200 in 2017. However, late in November, SSA revised the amount for 2018 to $128,400, based on updated wage data reported to SSA in late October. The table above has been updated to reflect this change.