April 4, 2009

Taxable Wage Base

Your Guide

Definition

The maximum amount of wages that can be used to compute social security contributions
Referring Cite
Treas. Reg. § 1.401(l)-2(d)
Additional Helpful Information
Contributions to qualified plans and SEP IRAs can be integrated with social security ( social security integration). The primary objective of this integration is to permit individuals, whose social security contributions are capped at the taxable wage base, to receive a larger contribution amount under the qualified plan or SEP IRA.

Written By

Retirement Dictionary Staff

Frequently Asked Questions Regarding

72(t) payments – also referred to as Substantially Equal Periodic Payments (SEPP) can be taken from IRAs, qualified plans-including 401(k) plans, and 403(b) accounts. However, while 72(t) payments can be taken from IRAs at any time, they can be taken from qualified plans and 403(b) accounts only after the participant has separated from service with the employer that sponsored the plan. Therefore, if you are still employed by the company that sponsored your 401(k) plan, you cannot take 72(t) payments from that account.  But, if you are no longer employed by that company, then you may be able to take 72(t) payments from the account.

Please contact our office to help you determine if a 72(t) payment program is suitable for you.

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