Tax Alert- No changes to retirement plan contributions for 2016
Retirement plan contribution limits are indexed for inflation, but with inflation remaining low, the limits remain unchanged for 2016:
|Type of limit||2016 limit|
|Elective deferrals to 401(k), 403(b), 457(b)(2) and 457(c)(1) plans||$18,000|
|Contributions to defined contribution plans||$53,000|
|Contributions to SIMPLEs||$12,500|
|Contributions to IRAs||$5,500|
|Catch-up contributions to 401(k), 403(b), 457(b)(2) and 457(c)(1) plans||$6,000|
|Catch-up contributions to SIMPLEs||$3,000|
|Catch-up contributions to IRAs||$1,000|
Nevertheless, if you’re not already maxing out your contributions, you still have an opportunity to save more in 2016. And if you turn age 50 in 2016, you can begin to take advantage of catch-up contributions.
However, keep in mind that additional factors may affect how much you’re allowed to contribute (or how much your employer can contribute on your behalf). For example, income-based limits may reduce or eliminate your ability to make Roth IRA contributions or to make deductible traditional IRA contributions. If you have questions about how much you can contribute to tax-advantaged retirement plans in 2016, check with us.