Traditionally, the IRS has announced inflation-adjusted retirement plan limits in October, based on the inflation rate during the prior twelve-month period. This time, however, the IRS announcement was that these limits would not be decreased, despite an actual rate of deflation during the prior twelve months. Accordingly, virtually all of the dollar amounts under which retirement plans have been administered during 2009 will remain the same for 2010.
This applies not only to private employer plans, but also to the Social Security system. The Social Security taxable wage base, the monthly and annual thresholds at which earnings will trigger a reduction in Social Security benefits, and even those benefits, themselves, will remain where they were in 2009.
As we have for the last several years, Spencer Fane’s Employee Benefits Group has prepared a handy reference card containing the current and next years’ dollar amounts in this area. A PDF version of that card may be downloaded here. We would also be pleased to send one or more laminated versions of the card upon request. Just contact any member of our Employee Benefits Group, or the Spencer Fane Marketing Department at 816-474-8100.
As usual, this year’s card also reflects certain of the dollar amounts applicable to health savings accounts (“HSAs”) and Medicare. Unlike the retirement plan limits, these HSA and Medicare amounts will increase for 2010. In fact, the Medicare Part B premium and deductible will see substantial increases. This year’s card thus illustrates the predicament facing many employees and retirees – medical costs continue to increase, while their retirement savings have suffered a significant setback.