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TAX TALK: No Changes to Retirement Plan Contributions for 2016

Posted by Hal Zemel, CPA, J.D., LL.M. on Jan 4, 2016 4:45:49 PM
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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 contributions to tax-advantaged retirement plans in 2016, contact me at hzemel@berdonllp.com or your Berdon advisor.  

Hal Zemel, a Tax Principal at Berdon LLP, has more than 20 years of experience in public accounting and advises businesses in the real estate, service, and manufacturing sectors.

Topics: TAX TALK

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