IRS Adjusts Retirement Plan Limits
Every year, the Internal Revenue Service (IRS) adjusts the amounts you can contribute to employer retirement plans and IRAs, based on inflation indexing. For 2017, the limits are slightly higher in some cases, while others stay the same. Here's a rundown on the key limits for participants:
Limits that will change for 2017
Defined benefit plans – The maximum size of the annual benefit for traditional pensions and related retirement plans increases to $215,000 for 2017 (up from $210,000).
Annual compensation – The maximum amount of compensation that can be taken into account for most employer retirement plan calculations increases to $270,000 (up from $265,000).
Deductible IRA contributions – Phase-outs in 2017 for deductible IRA contributions will reflect the following changes:
- For single filers participating in an employer plan, the phase-out range increases to between $62,000 and $72,000 for 2017 (up from $61,000 and $71,000).
- For an IRA contributor filing jointly who participates in an employer plan, the phase-out range increases to between $99,000 and $119,000 (up from $98,000 through $118,000).
- For an IRA contributor filing jointly whose spouse participates in an employer plan, the phase-out range increases to between $186,000 and $196,000 for 2017 (up from a range of $184,000 to $194,000).
Roth IRA contributions – For single filers, phase-outs for the ability to make contributions increase to a range of from $118,000 to $133,000 for 2017 (up from $117,000 to $132,000). For joint filers, the phase-out range increases to between $186,000 and $196,000 for 2017 (up from $184,000 to $194,000 for 2016).
Limits that won't change in 2017
Elective deferrals – The deferral limit for those who participate in a 401(k), 403(b), most 457 plans, and the government's thrift savings plan remains at $18,000 for 2017. The limit for catch-up contributions to these plans for participants age 50 or over remains at $6,000.
SIMPLE plan deferrals – The limit on earnings deferrals to a SIMPLE plan remains at $12,500 for 2017. The limit for catch-up contributions for participants age 50 or over holds steady at $3,000.
Highly compensated employees – The dollar limit used to define highly compensated employees (HCEs) for employer plans stays at $120,000 for 2017.
IRA and Roth contributions – The maximum amount you can contribute to traditional and Roth IRAs stays at $5,500 for 2017. The $1,000 limit on catch-up contributions for participants 50 or over isn't subject to inflation indexing.
© 2017. All Rights Reserved.
- Ask About Personal Residence Trusts
- What Are The 3 R's Of Roth IRAs?
- Avoid This Installment Sale Trap
- If Estate Tax Repeal Is Enacted Soon, Will It Stick?
- "New and Improved" QSBS Tax Break
- Lending Money? Watch Your Tax Step
- Why Aren't More Millennials Moving On Up And Out?
- Are You "Rich" Or Not? New Survey Hits The High Points
- 6 Ways To Close The Retirement Gap
- The myRa Is Cut Short, But Other Options Abound
- Foreign Intrigue In Estate Planning
- This Tax-Free Rollover Goes Right To Charity
- Four Tax Strategies In Retirement
- ETFs Can Provide Some Other-Worldly Benefits To Investors
- Watch Out For "Grandparent Scams"