Limits for Defined Contribution Plans to Increase in 2018
A defined contribution plan allows you to save for retirement while reducing taxation on your current income. The MCPS 403(b) plan allows employees to save on a tax-deferred basis through salary deduction. A 457(b) plan allows employees to defer compensation to the future, lowering current taxable income and offering potential tax-deferred growth.
In addition, did you know:
- You do not pay taxes on defined contribution plan income or on your investment earnings until you withdraw the money. Once you choose how much to contribute, your contributions are taken directly from your pay and deposited into a retirement savings plan account. Learn more about defined contribution plans on the Fidelity website.
- Effective in 2018, the yearly contribution limit for the 403(b) and 457(b) plans will increase from $18,000 to $18,500.
- The age 50 catch-up provision allows any participant who is at least 50 years of age to contribute an additional $6,000 to each plan. You can do this at any point during the calendar year. More information is available here.
- You can change your contribution amount at any time by logging in to the Fidelity website or by calling Fidelity at 800-343-0860.