IRS Announces Retirement Plan Limits for 2011
The IRS recently released its annual cost-of-living adjustments for certain qualified retirement plan thresholds. Because the needle on inflation barely moved last year, the limits for 2011 generally remain the same as they were in 2010, as shown in the chart below.
| Retirement plan provisions | Limit for 2010 | Limit for 2011 |
|---|---|---|
| Maximum annual dollar benefit for a defined benefit plan | $195,000 | $195,000 |
| Maximum dollar limit on additions to a defined contribution plan | $49,000 | $49,000 |
| Maximum amount of compensation taken into account for qualified retirement plans | $245,000 | $245,000 |
| Dollar limit for definition of “key employee” in top-heavy retirement plan | $160,000 | $160,000 |
| Dollar limit for definition of “highly compensated employee” in qualified plan | $110,000 | $110,000 |
| Dollar limit for elective deferrals to a 401(k) plan | $16,500 | $16,000 |
| Dollar limit for contributions to a Savings Incentive Match Plan for Employees (SIMPLE) | $11,500 | $11,500 |
| Dollar limit for elective deferrals to deferred compensation plans of state and local governments and tax-exempt organizations | $16,500 | $16,500 |
| Dollar limit for catch-up contributions to a SIMPLE plan | $2,500 | $2,500 |
| Dollar limit for catch-up contributions to a 401(k), 403(b), 457 or Simplified Employee Pension (SEP) plan | $5,500 | $5,500 |
However, the limits for certain IRA thresholds were bumped up slightly for 2011, as shown in the chart below.
| IRA thresholds | Limit for 2011 | Limit for 2010 |
|---|---|---|
| Phaseout of traditional IRA deduction for single filers | $56,000–$66,000 of AGI | $56,000–$66,000 of AGI |
| Phaseout of traditional IRA deduction for joint filers | $89,000–$109,000 of AGI | $90,000–$110,000 of AGI |
| Phaseout of contributions for traditional IRA if one spouse has employer plan | $167,000–$177,000 of AGI | $169,000–$179,000 of AGI |
| Phaseout of contributions to Roth IRAs for single filers | $105,000–$120,000 of AGI | $107,000–$122,000 of AGI |
| Phaseout of contributions to Roth IRAs for joint filers | $167,000–$177,000 of AGI | $169,000–$179,000 of AGI |