It does not look like 2008 is going to be a year of big changes for retirement plans. Let's look at what is changing and review what is going to stay the same.
New for 2008:
- Maximum compensation which can be considered for retirement plan purposes is increasing from $225,000 to $230,000
- The definition of a highly compensated employee is increasing to $105,000 from $100,000
- The maximum defined benefit amount is increasing to $185,000 from $180,000
- The maximum contribution to a retirement plan is increasing from $45,000 to $46,000.
- Corporate officers will be able to earn up to $150,000 without being counted as a key employee (the 2007 limit is $145,000)
- The taxable wage base for social security is increasing from $97,500 to $102,000
- IRA contributions (both traditional and Roth) are increasing from $4000 to $5000
Stays the same:
- Maximum elective salary deferrals remains $15,500 (this would be the 401(k), 403(b), and 457 limit)
- SIMPLE plan maximum contributions remain $10,500
- There is no change in the catch-up provisions for workers age 50 and older.