2009 Cost-of-Living Adjustments

October 20, 2008

The Internal Revenue Service and the Social Security Administration have published cost-of-living adjustments for 2009. The new plan limits, effective for plan years beginning on or after January 1, 2009, and the Social Security amounts effective for calendar year 2009, are as follows: 

Plan Limits

Maximum annual employee 401(k) salary deferrals 
New Limit $16,500 
Old Limit $15,500

Maximum annual “catch-up contributions”
New Limit $5,500 
Old Limit $5,000 

Maximum annual pension under defined benefit plan
New Limit $195,000
Old Limit $185,000

Maximum annual additions to an individual's defined contribution plan account
New Limit $49,000
Old Limit $46,000

Maximum includable annual compensation
New Limit $245,000
Old Limit $230,000 

Compensation used in determining Highly Compensated Employees
New Limit $110,000
Old Limit $105,000 

Minimum annual compensation level mandating inclusion in Simplified Employee Pensions
New Limit $550
Old Limit $500 

Employee Stock Ownership Plan (ESOP) amount that extends 5-year distribution period
New Limit $985,000
Old Limit $935,000 

Social Security Amounts

OASDI wage base
New Amount $106,800
Old Amount $102,000 

HI wage base
New Amount No Limit
Old Amount No Limit 

Benefit Payment COLA
New Amount 5.8%
Old Amount 2.3% 

Earnings Test* (Under full retirement age)
New Amount $14,160
Old Amount $13,560 

Earnings Test* (Year individual reaches retirement age)
New Amount $37,680
Old Amount $36,120 

* There is no limit on earnings beginning the month an individual attains full retirement age. 

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