IRS Announces 2016 Qualified Retirement Plan Limits


The IRS has announced cost-of-living adjustments affecting dollar limitations for pension plans and other retirement-related items for tax year 2016. All of the pension plan limitations will stay the same for 2016 because the cost-of-living index did not adjust significantly. The only adjustments were for the Roth IRA beginning income for phaseout, and maximum income thresholds.

Below are the details of the changed and unchanged limitations:

  2015 2016
401(k) elective deferral limit $18,000 $18,000
403(b) tax-sheltered annuity limit (tax-exempt organizations) $18,000 $18,000
457 deferred compensation limit (tax-exempt organizations) $18,000 $18,000
Catch-up contributions for those age 50 and over $6,000 $6,000
SIMPLE IRA $12,500 $12,500
SIMPLE 401(k) and SIMPLE IRA catch-up contribution limit for those age 50 and over $3,000 $3,000
Section 415 individual limit for defined benefit plans $210,000 $210,000
Section 415 individual limit for defined contribution plans $  53,000 $   53,000
Annual compensation limit for qualified plans $265,000 $ 265,000
Dollar limit for “highly compensated employee” $120,000 $120,000
Dollar limit for “key employee” $170,000 $170,000
Compensation limit for SEP eligibility $600 $600
Social Security wage base $118,500 $118,500
IRA contribution total individual limit pre-tax and/or Roth $5,500 $5,500
IRA catch-up limit for those age 50 and over $1,000 $1,000
Roth IRA beginning trigger for phaseout – single $116,000 $117,000
Roth IRA maximum income limit – single $131,000 $132,000
Roth IRA beginning trigger for phaseout – married $183,000 $ 184,000
Roth IRA maximum income limit – married $ 193,000 $194,000

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