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IRS Announces 2016 Retirement Plan Contribution Limitations


On October 21, 2015, the Internal Revenue Service announced cost of living adjustments affecting dollar limitations for pension plans and other retirement-related items for tax year 2016. Most of the limits were unchanged because the increase in the cost-of-living index did not meet the statutory thresholds that trigger their adjustment.
The following table is provided to help you determine how much to set aside for retirement planning in 2016.
Tax Year 2016 2015
IRA Contribution Limit – 219 (b) (5) (A) – Under Age 50 $5,500 $5,500
IRA Catch-Up Contribution Limit – 219 (b) (5) (B) – Age 50 or Over $1,000 $1,000
SIMPLE IRA Maximum Contributions – 408(p)(2)(E) – Under Age 50 $12,500 $12,500
SIMPLE IRA Maximum Catch-Up Contribution – 414 (v) (2) (B) (ii) – Age 50 or Over $3,000 $3,000
401 (k) and 403(b) Maximum Contributions $18,000 $18,000
401 (k) and 403(b) Maximum Catch-Up Contribution – Age 50 or Over $6,000 $6,000
Coverdell ESA Contribution Limit $2,000 $2,000
Employer Defined Contribution Limit – 415 (c) (1) (A) $53,000 $53,000
Elective Deferral Limit – 402(g) (1) $18,000 $18,000
Elective Deferral Catch-Up Limit – 414 (v) (2) (B) (i) $6,000 $6,000
Annual Compensation Cap – 401(a) (17)/404 (I) $265,000 $265,000
SEP Minimum Compensation – 408 (k) (2) (C) $600 $600
SEP Maximum Compensation – 408 (k) (3) (C) $265,000 $265,000
457 Elective Deferrals – 457(e) (15) $18,000 $18,000
Defined Benefit Limit – 415 (b) (1) (A) $210,000 $210,000
Highly Compensated Employee (HCE) – 414 (q) (1) (B) $120,000 $120,000
Key Employee – 416 (i) (1) (A) (i) $170,000 $170,000
Taxable Wage Base $118,500 $118,500

     

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