Retirement plan contribution limits are indexed for inflation, but with inflation remaining low, the limits remain unchanged for 2016:
- Elective deferrals to 401(k), 403(b), 457(b)(2) and 457(c)(1) plans stay at $18,000
- Contributions to defined contribution plans stay at $53,000
- Contributions to SIMPLEs stay at $12,500
- Contributions to IRAs stay at $5,500
- Catch-up contributions to 401(k), 403(b), 457(b)(2) and 457(c)(1) plans stay at $6,000
- Catch-up contributions to SIMPLEs stay at $3,000
- Catch-up contributions to IRAs stay at $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 how much you can contribute to tax-advantaged retirement plans in 2016, check with us.