retirement

Retirement Plan Contribution Limits for 2016

Low inflation is keeping the contribution and income limits mostly the same as in 2015.

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.

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
 20152016
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
 20152016
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

See Our Slide Show: 6 Savvy Moves to Stretch Your Retirement Savings

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