Retirement Contribution Limits

LAST WEEK, THE INTERNAL REVENUE SERVICE (IRS) released its cost of living adjustments for contributions to a variety of retirement saving vehicles. The limits affecting 401(k) plans, the federal government’s Thrift Savings Plan (TSP), and other similar programs provided for by Section 402(g)(1) remain the same at $15,500. However, the limitation for defined contribution plans under Section 415(c)(1)(A) increased from $45,000 to $46,000 and the annual benefit limitation for a defined benefit plan under Section 415(b)(1)(A) increased from $180,000 to $185,000. Other increases include:

The applicable dollar amount under Section 219(g)(3)(B)(i) for determining the deductible amount of an IRA contribution for taxpayers who are active participants filing a joint return or as a qualifying widow(er) increased from $83,000 to $85,000. Additionally, the applicable dollar amount under Section 219(g)(3)(B)(ii) for all other taxpayers (other than married taxpayers filing separate returns) increased from $52,000 to $53,000. The applicable dollar amount under Section 219(g)(7)(A) for a taxpayer who is not an active participant, but whose spouse is an active participant, increased from $156,000 to $159,000.

The adjusted gross income limitation under Section 408A(c)(3)(C)(ii)(I) for determining the maximum Roth IRA contribution for taxpayers filing a joint return or as a qualifying widow(er) increased from $156,000 to $159,000. The adjusted gross income limitation under Section 408A(c)(3)(C)(ii)(II) for all other taxpayers (other than married taxpayers filing separate returns) increased from $99,000 to $101,000.

These aren’t exactly huge changes…but every little bit helps.