Each year the U.S. government adjusts the limits for qualified plans and social security to reflect cost of living adjustments and changes in the law. Many of these limits are based on the “plan year.” The elective deferral and catch-up limits are always based on the calendar year. Here are the 2009 limits as well as the three prior years for comparative purposes:
| Limit | 2009 | 2008 | 2007 | 2006 |
| Maximum compensation limit | $245,000 | $230,000 | $225,000 | $220,000 |
| Defined contribution plan maximum contribution | $49,000 | $46,000 | $45,000 | $44,000 |
| Defined benefit plan maximum benefit | $195,000 | $185,000 | $180,000 | $175,000 |
| 401(k), 403(b) and 457 plan maximum elective deferrals | $16,500 | $15,500 | $15,500 | $15,000 |
| Catch-up contributions* | $5,500 | $5,000 | $5,000 | $5,000 |
| SIMPLE plan maximum elective deferrals | $11,500 | $10,500 | $10,500 | $10,000 |
| Catch-up contributions* | $2,500 | $2,500 | $2,500 | $2,500 |
| IRA maximum contributions | $5,000 | $5,000 | $4,000 | $4,000 |
| Catch-up contributions* | $1,000 | $1,000 | $1,000 | $1,000 |
| Highly compensated employee threshold | $110,000 | $105,000 | $100,000 | $100,000 |
| Key employee (officer) threshold | $160,000 | $150,000 | $145,000 | $140,000 |
| Social security taxable wage base | $106,800 | $102,000 | $97,500 | $94,200 |
*Available to participants who are or will be age 50 or older by the end of the calendar year.
This newsletter is intended to provide general information on matters of interest in the area of qualified retirement plans and is distributed with the understanding that the publisher and distributor are not rendering legal, tax or other professional advice. Readers should not act or rely on any information in this newsletter without first seeking the advice of an independent tax advisor such as an attorney or CPA.
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