IRS Announces 2010 Cost-of-Living Adjustments for Retirement Plans
October 23, 2009
Last week the IRS announced the 2010 cost-of-living adjustments applicable to various dollar limits for retirement plans. All of these limits will remain unchanged in 2010. The annual limit for elective deferrals will remain $16,500 and for catch-up contributions for individuals age 50 or over $5,500.
Limitations that are adjusted by reference to Section 415(d) remain unchanged for 2010 because the cost-of-living index for the quarter ending September 30, 2009, is less than the cost-of-living index for the quarter ending September 30, 2008. The Social Security Act procedures for adjusting benefit amounts state that any decline in the applicable index cannot result in a reduced limitation. The Social Security Administration also recently announced that the Social Security wage base will remain at $106,800 for 2010.
Below are the principal limits applicable for 2010.
| Limit | 2010 |
| Compensation Limit | $245,000 |
| 401(k) Deferrals | $16,500 |
| 401(k) Catch-up Contributions | $5,500 |
| Defined Contribution 415 Limit | $49,000 |
| Defined Benefit 415 Limit | $195,000 |
| Highly Compensated Employee | $110,000 |
| Social Security Taxable Wage Base | $106,800 |
