Retirement plan benefit limits for 2006
originally posted: 11/22/2006 reposted: 2/18/2011 This post has not been recently reviewed or revised by the author and may be out of date. If in doubt, please send a new question or ask for an update.
Q: Is it true that pension plans need to be revised now in order to take advantage of the maximum allowable benefits next year?
A: Yes, the maximum benefits for a wide range of retirement benefit plans change each year and so if your plan document has a stated maximum amount of participation or benefit, it should be adjusted before the end of this year in order to benefit from the higher allowances beginning in January 2006. Internal Revenue Service has announced cost of living adjustments applicable to dollar limitations for pension plans and other items for the year 2006. The following limits have been set by the Internal Revenue Service effective January 1, 2006: 401(k), 403(b) & 457 Elective Deferrals $ 15,000 Catch-Up Contribution Limit $ 5,000 SIMPLE 401(k) and SIMPLE IRA Deferral Limit $ 10,000 Catch-Up Contribution Limit $ 2,500 Annual Benefit Limit $175,000 (Defined Benefit 415 Dollar Limit) Annual Additions Limit $ 44,000 (Defined Contribution 415 Dollar Limit) Annual Compensation Limit $220,000 (Used for Contributions/Benefits) Top-Heavy Key Employee (Officer) $140,000 Compensation Limit Highly Compensated Employee $100,000 Compensation Limit Social Security Taxable Wage Base $ 94,200 (Income Subject to Social Security)
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