What is the maximum salary deferral limit for employees in a 403(b) plan for 2018?

What is the maximum salary deferral limit for employees in a 403(b) plan for 2018?

• A. $16,000
• B. $16,500
• C. $18,000
• D. $19,000

Answer: (B)

The maximum salary deferral limit for employees participating in a 403(b) plan for the year 2018 was set at $18,500. This limit allows employees to contribute a portion of their pre-tax salary to their retirement savings plan, reducing their taxable income for the year. The limit for 2018 reflects a slight increase over previous years, aligning with the IRS's periodic adjustments for inflation. It's important to note that there are also catch-up contribution options available for employees aged 50 and older, which allow them to contribute an additional $6,000, raising the total contribution limit for those individuals. However, the standard limit for new contributions in that year remained at $18,500. This understanding of contribution limits is crucial for both employees looking to plan their retirement savings and employers administering 403(b) plans to ensure compliance with IRS regulations.

The maximum salary deferral limit for employees participating in a 403(b) plan for the year 2018 was set at $18,500. This limit allows employees to contribute a portion of their pre-tax salary to their retirement savings plan, reducing their taxable income for the year.

The limit for 2018 reflects a slight increase over previous years, aligning with the IRS's periodic adjustments for inflation. It's important to note that there are also catch-up contribution options available for employees aged 50 and older, which allow them to contribute an additional $6,000, raising the total contribution limit for those individuals. However, the standard limit for new contributions in that year remained at $18,500.

This understanding of contribution limits is crucial for both employees looking to plan their retirement savings and employers administering 403(b) plans to ensure compliance with IRS regulations.