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2018 Cost of Living Adjustments

Employee Benefits Advisory
October 23, 2017

 (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.

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