November 1997 Vol.II, No.2

The Internal Revenue Service has announced the following 1998 dollar limits for qualified plans and other tax-favored retirement plans. The lull in the indexing of most of the limits is due to low inflation and the new laws enacted to slow the indexing.

 1997  1998
Maximum annual payout from a defined plan at the social security normal retirement age  $125,000  $130,000
Maximum annual contribution to an individual's defined contribution account  $30,000  $30,000
Maximum elective Section 401(k) and 403(b) deferrals  $9500  $10,000
Maximum amount of annual compensation that can be taken into account for determining benefits or contributions under a qualified plan  $160,000  $160,000
Test to identify highly compensated employees  $80,000  $80,000

The Social Security Administration has announced the 1998 inflation-adjusted dollar tests and limits for Social Security benefits:

Wage Base:  1997  1998
 for Social Security Tax  $65,400  $68,400
 for medicare  No Limit  No Limit
Maximum benefit at age 65 (for an individual attaining age 65 who has received no wages beyond age 62) $1,311.40
per month
per month
Earnings Test (amount that can be earned before benefits are cut)    
 Age 65-69  $13,500/yr.  $14,500/yr.
 Under Age 65  $8,640/yr.  $9,120/yr.