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2001October 2000 Bulletin, "2001 IRS Dollar Limits for Retirement Plans and 2001 Social Security Factors"

Dollar limits for qualified plans and other tax-favored retirement plans for 2000 and 2001 are noted in the following table. (An asterisk indicates limits that are likely to change if Congress passes sweeping pension reform legislation. At the time this Bulletin went to press, that legislation - the Retirement Security and Savings Act of 2000 - was still under consideration.)

The Social Security Administration has announced the 2001 inflation-adjusted dollar tests and limits for Social Security benefits. The new amounts are shown below, next to those in effect for 2000:

** $25,000/year in the year an individual turns age 65 ($2,084/month until the individual's 65th birthday). Under the Senior Citizens' Freedom to Work Act of 2000, people who are covered by Social Security can receive their full benefits once they reach Social Security normal retirement age (currently age 65) regardless of how much they work and earn.

The increase in the "old law Social Security wage base" will cause an increase in the maximum benefit guaranteed by the Pension Benefit Guaranty Corporation (PBGC) under private-sector single employer pension plans that terminate during 2001, as follows: