new limits

[Tom Poje]

the Consumer Price Index was released today

July was 240.647

Aug was 240.853

so unless Sept drops below 238.5

the comp limit will be 270,000

415 limit 54,000

db limit 215,000

key ee 175,000

assuming my spreadsheet is still working and I plugged the numbers correctly

[Mike Preston]

Needs to drop below 238.421 to avoid the increase in 1) comp limit; 2) 415 dc limit

but db limit and key ee are going up to 215k and 175k anyway.

[Carol V. Calhoun]

Your projections are always so helpful! Any ideas on:

• elective deferrals?
• HCE?

[Tom Poje]

not even close, not even worth mentioning

the other limits are pretty much guaranteed

but you are more than welcome to the spreadsheet so you can plug in your numbers every year

indexed limits.xls

[Carol V. Calhoun]

Thanks! It's now up at my site, with the usual credit to you.

[Tom Poje]

many moons ago (2000) I had written a Q and A on Benefits Link on how to calculate the limits. I had no idea, so it took a bit of research on my part simply because I had no idea (except for attending the ASPPA Conference and finding out what the new limits would be) someone actually sent me a kind note indicating I failed to mention the calculation is done to 3 places. Though it doesn't really matter that much, I do like having an idea months before the numbers are actually released.

shortly thereafter someone sent me a spreadsheet based on my Q and A to see if the person had understood the article correctly and if the calculations were correct. It had never even crossed my mind to do something like that.

the excel sheet has a date of January 2001, so I guess it goes back that far. I'm grateful for the original version, though I certainly have modified over the years, so more than willing to share it.

[XTitan]

Social Security Wage base has been announced at $127,200. The September CPI doesn't change Tom's numbers above, so now it's up to the IRS to get the release out.

[Tom Poje]

I was trying to figure out why the wage base shot up so much (comparatively speaking)
but that is right, it would have gone up last year, but since there was a 0% soc sec increase it couldn't change.
based on the new value, the national wage avg must have been around 48,100 - 48,150 or so
I added the calculator for that to the most recent spreadsheet and plugging 48100 produces a TWB value of 127,200.

all this takes the suspense out of the old days of attending the ASPPA Conference and learning what the new limits were.

[XTitan]

I keep the following link bookmarked https://www.ssa.gov/OACT/COLA/AWI.html. The wage index was 48,098.63, and I have yet to figure out any good source to estimate this ahead of the release. If it wasn't for the negative CPI-W last year, the wage base would have been $122,700 for 2016, so the jump isn't really that big.

[Mike Preston]

What I find most interesting about the September rates announcement is that they simultaneously revised downward both the July and August rates meaning that it was (barely) possible to have accurately predicted a September rate that would have barely registered an increase but there would have been no increase! Makes advance hand wringing even less productive.

[Tom Poje]

based on the new wage base, here is the calculation for covered compensation.

tried this on Relius for 2017 on my dummy test plan and the numbers are the same.

...........

while the rates were revised, a reminder that rates have been revised in the past, and such revisions have always been minimal.

about as close as it could ever change anything was in 2007 when the actual deferral limit was 15,501, but even in that year, 'looking ahead' was accompanied by 'we have no idea until the final numbers come out.

but as a general rule most years you can generally have a good idea if the rates will change or not.

.......

XTitan

agree with your comments, there is no way I know of how to estimate anything on the TWB, and I have used that website before to obtain the actual wage average used. I was at home yesterday and had no access to that website to obtain the actual value

covered comp at 127200.xls

[XTitan]

https://www.irs.gov/pub/irs-drop/n-16-62.pdf

The official release!