The 2016 retirement plan limits have recently been announced by the IRS.<\/p>\n
These new limits are effective January 1, 2016.<\/p>\n
If you are an employee and a retirement plan participant, be sure to contact your employer as soon as possible if you wish to change your retirement plan salary deferrals for 2016. Of course, if you\u2019re a Springwater client, we\u2019re happy to assist!<\/p>\n
If you are an employer and either don’t have a retirement plan in place or have questions about your existing one, please contact us for a complimentary tailor-made proposal and comparison with your current plan. You’ll have happier, more satisfied employees while also saving money.<\/p>\n
401(k)s, 403(b)s, etc.\u00a0 <\/b>The standard contribution limit for employee salary deferrals to a qualified retirement plan \u2013 401(k), 403(b), most 457 plans, and the government\u2019s Thrift Savings Plan \u2013 remains at $18,000 for 2016 (was $18,000 for 2015).<\/p>\n
The \u201cCatch-up\u201d.\u00a0 <\/b>The \u201ccatch-up\u201d deferral limit for these plans also remains at $6,000 (was $6,000 for 2015), so a person who is age 50 or older can defer a maximum of $24,000 in 2016.<\/p>\n
Annual Defined Contribution Limit.\u00a0 <\/b>The maximum \u201cannual additions\u201d limit (salary deferrals, plus profit sharing, plus forfeiture allocations, etc) to a defined contribution plan remains at $53,000 for 2016 (it was also $53,000 for 2015). Note that the catch-up deferral is in addition to this, so the annual contribution limit for a person age 50 or older is $59,000.<\/p>\n
SEP IRAs and Solo 401(k)s.<\/b>\u00a0 The contribution limit for a SEP IRA or Solo 401(k) in 2016 is increased to the lesser of (a) $53,000, or (b) 25% of the employee\u2019s salary.\u00a0 The compensation limit used in the savings calculation is again $265,000 for 2016 (was $265,000 for 2015).<\/p>\n
IRAs.<\/b>\u00a0 The contribution limits for Traditional and Roth IRAs remain at $5,500 for 2016; the catch-up contribution for a person age 50 or older remains at $1,000 in 2016, for a total of $6,500.<\/p>\n
Simple IRAs.<\/b>\u00a0 The contribution limit for a Simple IRA remains at $12,500 for 2016 (was $12,500 for 2015); the catch-up contribution for a person age 50 remains at $3,000 (was $3,000 for 2015), for a total of $15,500.<\/p>\n
Defined Benefit Plans.<\/b>\u00a0 Finally, the limitation on the annual benefit of a \u201cdefined benefit\u201d plan in 2016 is $210,000, unchanged from 2015.<\/p>\n","protected":false},"excerpt":{"rendered":"
The 2016 retirement plan limits have recently been announced by the IRS. These new limits are effective January 1, 2016. If you are an employee and a retirement plan participant, be sure to contact your employer as soon as possible if you wish to change your retirement plan salary deferrals for 2016. Of course, if […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","_mi_skip_tracking":false,"footnotes":""},"categories":[3,7],"tags":[13,14,43,66,87,88,117,119,122,124,125],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/springwaterwealth.com\/wp-json\/wp\/v2\/posts\/1588"}],"collection":[{"href":"https:\/\/springwaterwealth.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/springwaterwealth.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/springwaterwealth.com\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/springwaterwealth.com\/wp-json\/wp\/v2\/comments?post=1588"}],"version-history":[{"count":0,"href":"https:\/\/springwaterwealth.com\/wp-json\/wp\/v2\/posts\/1588\/revisions"}],"wp:attachment":[{"href":"https:\/\/springwaterwealth.com\/wp-json\/wp\/v2\/media?parent=1588"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/springwaterwealth.com\/wp-json\/wp\/v2\/categories?post=1588"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/springwaterwealth.com\/wp-json\/wp\/v2\/tags?post=1588"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}