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.

This newsletter/advertisement is produced for our clients, friends and associates through an arrangement with WPI Communications, Inc. for the representatives’ use. Although the editorial content is professionally researched, written and edited, neither our firm nor any of its agents, representatives or associates make any representations regarding the accuracy of the content or its applicability to your situation. The information in this communication is not intended as tax or legal advice. In accordance with IRS Circular 230, the information provided herein may not be relied on for purposes of avoiding any federal tax penalties. Any tax advice contained in the body of this material was not intended or written to be used, and cannot be used, by the recipient for the purpose of 1) avoiding penalties that may be imposed under the Internal Revenue Code or applicable state or local tax law provisions, or 2) promoting, marketing or recommending to another party any transaction or matter addressed herein. You are encouraged to seek tax or legal advice from an independent advisor.

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