How much can I contribute to my IRA and 401(k) in 2016? Are the income limits for Roth IRAs going to increase?
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The contribution amount will not increase in 2016 because the increase in the cost-of-living index did not meet the thresholds that trigger an adjustment. The maximum you can contribute to a 401(k), 403(b), most 457 plans and the federal government's Thrift Savings Plan will remain at $18,000. The catch-up contribution will remain the same, too – you can contribute an extra $6,000 if you’ll be 50 or older anytime in 2016.
IRA maximum contributions aren’t changing, either. You will be able to contribute up to $5,500 to an IRA in 2016, plus an extra $1,000 if you're 50 or older.
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The Roth IRA income limits will be $1,000 higher than in 2015. You’ll be able to contribute the full amount to a Roth IRA in 2016 if your adjusted gross income is less than $184,000 if you’re married filing taxes jointly; the contribution amount will phase out completely if you earn more than $194,000. Singles will be able to contribute the full amount if their income is below $117,000 in 2016; the contribution amount will phase out completely if they earn more than $132,000.
The income limits to qualify for the retirement saver’s credit will also increase slightly. To be eligible for the credit, your income must be less than $61,500 if married filing jointly (up from $61,000 in 2015), or $46,125 for a head of household (up from $45,750) or $30,700 if you're single (up from $30,500). This credit is worth 10%, 20% or 50% of the first $2,000 you contribute to an IRA, 401(k) or other retirement-savings plan (the higher your income, the lower the percentage). See How to Maximize the Retirement Saver's Tax Credit for more information about this credit.
| Contribution Limits | ||
|---|---|---|
| Row 0 - Cell 0 | 2015 | 2016 |
| 401(k), 403(b), 457, Thrift Savings Plan contributions (not including employer contributions) | $18,000 | $18,000 |
| 401(k), 403(b), 457, Thrift Savings Plan catch-up contributions (for workers 50+) | $6,000 | $6,000 |
| IRA and Roth IRA contributions | $5,500 | $5,500 |
| IRA and Roth IRA catch-up contributions (for workers 50+) | $1,000 | $1,000 |
| Solo 401(k) | $53,000 | $53,000 |
| Solo 401(k) catch-up contributions (for workers 50+) | $6,000 | $6,000 |
| Simplified Employee Pension | $53,000 | $53,000 |
| Income Limits | ||
|---|---|---|
| Row 0 - Cell 0 | 2015 | 2016 |
| Roth IRA, married filing jointly | $193,000 | $194,000 |
| Roth IRA, singles | $131,000 | $132,000 |
| Retirement savers' credit, married filing jointly | $61,000 | $61,500 |
| Retirement savers' credit, head of household | $45,750 | $46,125 |
| Retirement savers' credit, single or married filing separately | $30,500 | $30,700 |
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