Yesterday the IRS announced the various dollar limits for retirement plans that will apply for 2011. In general, these limits will remain unchanged from 2010, or the inflation adjustments will be small. The annual limit for elective deferrals will remain $16,500 and the annual limit for catch-up contributions for individuals age 50 or over will remain $5,500. In both cases, these are the same limits that applied in 2009 and 2010.
Limitations that are adjusted by reference to Section 415(d) remain unchanged for 2011 because the cost-of-living index for the quarter ending September 30, 2010, while greater than 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 2011.
Below are the principal limits applicable for 2011.
Limit 2011 Amount
Compensation Limit $245,000
401(k) Deferrals $16,500
401(k) Catch-up Contributions $5,500
Defined Contribution Annual 415 Limit $49,000
Defined Benefit Annual 415 Limit $195,000
Highly Compensated Employee $110,000
Social Security Taxable Wage Base $106,800