2017-2018 401k and IRA Limits

Posted by Madison on December 6, 2015

Updated: October 24, 2017. The 2018 IRA limits will not change.

The 2018 401k contribution limits will increase.

It’s time to start planning your contributions for next year.

The 401k limits and IRA limits are determined based on inflation, but can only increase in $500 increments.

The 2018 social security wage base increased by $1,500.

Traditional IRA and 401k Limits

These are the limits for the traditional IRA and the 401k, although the Roth 401ks and IRA limits will be the same as the traditional 401k and traditional IRAs.

2017 & 2018 Contributions

Here are the 2017 & 2018 contribution limits for IRAs and 401ks:

401k Contributions 2017 2018
Maximum $ 18,000 $ 18,500
Catch-up 50 and over $ 6,000 $ 6,000
IRA Contributions 2017 2018
Maximum $ 5,500 $ 5,500
Catch-up 50 and over $ 1,000 $ 1,000

You can make your 2018 contributions as early as January 1 for the whole year. If you contribute 2018 IRA money between January 1 and April 17, be sure to designate the calendar year 2018 if you have already contributed the maximum for 2017.

Since the 2018 limits will stay the same for the IRA, if you use automatic investments, you probably won’t have to make any changes. However, you may want to change your deferral rate for the 401k.

To maximize your IRA investments, make sure you aren’t paying extra fees in your IRA. You can transfer your IRA to another broker to avoid annual fees. We use Vanguard for our IRAs.

2017 Contributions

2017 IRA contributions can be made until April 17, 2018, the same as the tax deadline.

401k contribution deadlines are based on the calendar year. 2017 401k contributions are due at the end of the year.

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Comments to 2017-2018 401k and IRA Limits

  1. The 401k contribution limits were increased as part of the 2001 tax cuts. These tax cuts are expiring unless they are extended. Are the contribution limits impacted by this? I know in 2006, the IRA increase from $2000 to $4000 was made permanent, but I’m not sure about the 401k limit.

    Brian

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