Michael A. Webb, vice president, Cammack Retirement Group, answers:
Kudos for you for already planning for next year! As for the timing of the announcement of the limits, the Internal Revenue Service (IRS) has to wait until the release of inflation figures measured through the third quarter of the current year (3rd quarter 2014, in this case) in order to calculate the limit for the following year (2015 in this case). Since the third quarter closes on September 30, the limits are typically announced during the month of October. Unfortunately, it is not announced on the same day each year, so it can be difficult for planning purposes to rely on specific notification timing in order to interface with payroll, alert employees, etc.
Over the last five years, the new limits have been announced on the following dates:
2014: October 31, 2013
2013: October 18, 2012
2012: October 20, 2011
2011: October 28, 2010
2010: October 15, 2009
Based on this pattern, it is a fairly safe bet that the IRS will release the 2015 limits sometime during the second half of October. Note that some individuals/entities provide ESTIMATES of what the new limits will be prior to that time, but nothing is official until the IRS actually releases the limits.
If you wish to be among the first to receive news of the new limits, you can check the IRS website (http://www.irs.gov) each day during the second half of October, or subscribe to the various IRS newsletters by clicking on the Subscriptions tab at the top of the web page. Also, the PLANSPONSOR website (http://www.plansponsor.com) typically releases the limits shortly after the IRS announcement.
For more details as to how the limit increases are calculated, see “Ask the Experts:How Are Contribution Limits Set?”
Thank you for your question!
NOTE: This feature is to provide general information only, does not constitute legal advice, and cannot be used or substituted for legal or tax advice.