IRS Announces 2016 Retirement Plans Contribution Limits For 401(k)s And More

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Inflation adjusted savings figures have been published by the Treasury Department for retirement accounts in 2016. For 2016, the Treasury Department published inflation adjusted savings figures for retirement accounts.

It’s not hard to believe that the 2014 pension contribution limits were the same as 2013. However, there was a modest increase in the maximum amount you could have saved last year. These increases are being carried forward to 2016.

401(k)s. The annual contribution limit for employees who participate in 401(k), 403(b), most 457 plans, and the federal Thrift Savings Plan is $18,000. This amount is the same as 2015

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The 401K Catch Up. If your plan allows, you can still make $6,000 more catch-up contributions in 2016.

Solo 401 (ks) or SEPIRAs. This amount is determined by how much an employer can contribute in relation to their salary. Entrepreneurs can receive huge tax breaks to help save for retirement by lowering their compensation.

The SIMPLE. 2016 SIMPLE retirement accounts limits are $12,500. There is still $3,000. Catch-up limit.

Defined benefit plans. A defined-benefit plan’s annual benefit limit for 2016 is $210,000. This powerful pension plan is designed for high-earners who are self-employed. These are an individual version of the type more commonly used in corporate America prior to 401(k span>

Individual retirement accounts. In 2015, the $5500 annual contribution limit to an Individual Pension Account was unchanged. Contributions to 2015 IRAs are still possible up until April 15, 2016.

Deductible IRA Phase Outs. In 2015 you can earn more but still be able deduct contributions to a pre-tax IRA. It is not deductible.

In 2016, the deduction for taxpayers who contribute to a traditional IRA is phased out for singles and heads who are covered by a workplace retirement plan. For married couples filing jointly, the income phase-out range is $98,000 to $118,000.

These are the beneficiaries of one the 2016 adjustments. If their combined income exceeds $184,000. This is an increase from $183,000 to $193,000 in 2015. Married couples filing separate returns that are covered by a workplace retirement plan are exempt from the phase-out. The annual cost of living adjustment ranges from $0 to $10,000.

Roth IRA Phase-Outs. This increase was $183,000 to $193,000 for 2015. If married couples file jointly, it is $194,000 to $194,000. For 2015, this increase was $183,000 to $193,000. The income phase-out ranges for singles and heads were $117,000 to $122,000. This represents an increase of $116,000 to $121,000 over 2015.

If you earn too much, you can convert a Roth IRA into a non-deductible IRA. Congress lifted income restrictions from Roth IRA conversions. You can get a Roth IRA if you are a high-earner couple.

Savings credit. This is the last change in 2016. AGI limit for saver’s credit (also known as the retirement savings credits) has been raised to $61,500 for married couples; $46,125 for each head of household; and $30,000.75 for married individuals or singles.

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