Retirement Account Contribution Limits

Retirement Account Contribution Limits

2016 Contributions to Retirement Plans:

The 401(k) contribution limit is 100 % of earned income or $18,000 – this applies to 403(b) and 457 plans also.

Individuals age 50 and older can contribute an additional $6,000.

The contribution limit on a SIMPLE Plan stays at $12,500

Individuals age 50 and older can contribute an additional $3,000.

The contribution limit for a Traditional IRA is 100% of earned income or $5,500, whichever is less.

Individuals age 50 and older can contribute an additional $1,000.

Contributions for 2016 must be made by April 15, 2017.

No contributions allowed beginning the year you reach 70 ½.

Traditional IRA contributions may be tax-deductible, but there are several factors that may limit you from the deduction depending on whether you or your spouse are covered by a retirement plan at work or your Modified Adjusted Gross Income exceeds $118,000 for couples and $71,000 for singles.

The contribution limit for a Roth IRA is $5,500.

Individuals age 50 and older can contribute an additional $1,000.

Contributions to a Roth IRA do NOT qualify for a tax deduction.

The Income ceilings on Roth IRAs increased in 2016.  The phase out range ends when your Adjusted Gross Income reaches $194,000 for couples and $132,000 for singles.