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Retirement Planning Plan Type Facts Tax Facts

RETIREMENT TAX FACTS

Uncle Sam allows more retirement savings

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Certain dollar limits on retirement plans are nudged up annually to help you keep pace with inflation.  The bottom line: Most Americans are allowed to set more aside in their retirement plans this year.  Here are the new 2007 limits from the IRS.

Limitation

2007
Annual Dollar Limits

2006
Annual Dollar Limits

2005
Annual Dollar Limits

Annual compensation limit

$225,000

$220,000

$210,000

402(g) elective deferral limit

$15,500

$15,000

$14,000

457 deferral limit

$15,500

$15,000

$14,000

SIMPLE limits

$10,500

$10,000

$10,000

Highly compensated employee

$100,000

$100,000

$95,000

415 defined contribution limit

$45,000

$44,000

$42,000

Defined benefit annual benefit limit

$180,000

$175,000

$170,000

Catch-up contribution for 50 and older

$5,000

$5,000

$4,000

Catch-up contribution for 50 and older (SIMPLE IRA & SIMPLE 401(K))

$2,500

$2,500

$2,000

SEP coverage limit

$500

$450

$450

This chart is for informational purposes only and should not be construed as tax advice.

 



This information is based on Lincoln's interpretation of the tax code and a tax advisor should be consulted for your individual circumstances. Any discussion pertaining to taxes in this communication (including attachments) may be part of the promotion or marketing of a product.  As provided for in government regulations, advice (if any) related to federal taxes that is contained in this communication (including attachments) is not intended or written to be used, and cannot be used, for the purpose of avoiding penalties under the Internal Revenue Code.  Individuals should seek advice based on their own particular circumstances from an independent tax advisor. 

The elective deferral limit is the maximum contribution that can be made on a pre-tax basis to a 401(k) or 403(b) plan (Internal Revenue Code section 402(g)(1)).  The 457 deferral limit applies a similar restriction to certain government plans.

 

 
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