What’s new in 2016? Not much.
Each year, the IRS looks at the increase in the cost-of-living, and determines whether adjustments to the retirement plan limits are warranted. For 2016, all limits remain the same as 2015. The IRS determined that the cost-of living did not increase significantly enough to increase retirement plan limits.
2015 and 2016 Retirement Plan Limits
|Retirement Plan Type||Maximum Contribution Amount|
|Salary Deferral Limit||$18,000|
|Catch-up Contribution for 401(a), 403(b) and 457 plans||$6,000|
|SIMPLE Salary Deferral Limit||$12,500|
|SIMPLE Catch-up Contribution||$3,000|
|457(b) Deferral Limit||$18,000|
|Maximum Defined Contribution Annual Addition||$53,000|
|Highly Compensated Employee Compensation Threshold||$120,000|
|Maximum Compensation for Benefits and Allocations||$265,000|
|Maximum Defined Benefit Plan Benefit||$210,000|
|Key Employee: Officer Compensation||$170,000|
|Key Employee: 1% Owner Compensation||$150,000|
|IRA Contribution Limit||$5,500|
|IRA Catch-up Contribution||$1,000|
|SEP Compensation Threshold||$600|
|Social Security Taxable Wage Base||$118,500|
For a more complete listing of limitations that apply to retirement plans, click here to see the IRS form.
For more information, contact your Retirement Plan Advisor at Aldrich.