Investor Education | Flat Retirement Plan Limits in 2016
The IRS recently announced the annual cost-of-living adjustments for certain retirement plans. Most key limits did not change for 2016, including the following:
|Limit for 2015||Limit for 2016|
|Maximum dollar limit on additions to defined contribution plan||$53,000||$53,000|
|Maximum amount of compensation for qualified retirement plans||$265,000||$265,000|
|Dollar limit for elective deferrals to a 401(k) plan||$18,000 ($24,000 if age 50 or older)||$18,000 ($24,000 if age 50 or older)|
|Dollar limit for SIMPLE plan contributions||$12,500 ($15,500 if age 50 or older)||$12,500 ($15,500 if age 50 or older)|
|Dollar limit for traditional and Roth IRA contributions||$5,500 ($6,500 if age 50 or older)||$5,500 ($6,500 if age 50 or older)|
However, certain phase-out ranges for IRA contributions were raised slightly. For instance, availability to contribute to a Roth IRA increased from a threshold of $116,000 to $117,000 of modified adjusted gross income (MAGI) for single filers and $183,000 to $184,000 of MAGI for joint filers.
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