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President of Berntson Porter Wealth Management, LLC
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IRS Announces
2016 Retirement Plan
Contribution Limitations
 

On October 21, 2015, the Internal Revenue Service announced cost of living adjustments affecting dollar limitations
for pension plans and other retirement-related items for tax year 2016. Most of the limits were unchanged because
the increase in the cost-of-living index did not meet the statutory thresholds that trigger their adjustment.

The following table is provided to help you determine how much to set aside for retirement planning in 2016.
 

Tax Year
2016
2015
 

IRA Contribution Limit - 219 (b) (5) (A) - Under Age 50

 

$5,500

 

$5,500

 

IRA Catch-Up Contribution Limit - 219 (b) (5) (B) - Age 50 or Over

 

$1,000

 

$1,000

 

SIMPLE IRA Maximum Contributions - 408(p)(2)(E) - Under Age 50

 

$12,500

 

$12,500

 

SIMPLE IRA Maximum Catch-Up Contribution - 414 (v) (2) (B) (ii) - Age 50 or Over

 

$3,000

 

$3,000

 

401 (k) and 403(b) Maximum Contributions

 

$18,000

 

$18,000

 

401 (k) and 403(b) Maximum Catch-Up Contribution - Age 50 or Over

 

$6,000

 

$6,000

 

Coverdell ESA Contribution Limit

 

$2,000

 

$2,000

 

Employer Defined Contribution Limit - 415 (c) (1) (A)

 

$53,000

 

$53,000

 

Elective Deferral Limit - 402(g) (1)

 

$18,000

 

$18,000

 

Elective Deferral Catch-Up Limit - 414 (v) (2) (B) (i)

 

$6,000

 

$6,000

 

Annual Compensation Cap - 401(a) (17)/404 (I)

 

$265,000

 

$265,000

 

SEP Minimum Compensation - 408 (k) (2) (C)

 

$600

 

$600

 

SEP Maximum Compensation - 408 (k) (3) (C)

 

$265,000

 

$265,000

457 Elective Deferrals - 457(e) (15)

$18,000

$18,000

Defined Benefit Limit - 415 (b) (1) (A)

$210,000

$210,000

Highly Compensated Employee (HCE) - 414 (q) (1) (B)

$120,000

$120,000

Key Employee - 416 (i) (1) (A) (i)

$170,000

$170,000

Taxable Wage Base
 

$118,500
 

$118,500
 


 


 


 

 
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