The IRS has announced cost-of-living adjustments affecting dollar limitations for pension plans and other retirement-related items for tax year 2016. Here are a few key points to note regarding the items that did not change:
- The contribution limit for employees who participate in 401(k), 403(b), and most 457 plans remains unchanged at $18,000
- The catch-up contribution limit for those aged 50 and over remains unchanged at $6,000
- The limit on annual contributions to an individual retirement arrangement (IRA) remains unchanged at $5,500
- The deduction for taxpayers making contributions to a traditional IRA is phased out for singles and heads of household who are covered by a workplace retirement plan and have modified adjusted gross incomes (AGI) between $61,000 and $71,000, unchanged from 2015.
For additional details on the IRS’ announcement, including details on the items that did experience modest changes, please click here.
If you’d like to learn how CBG Benefits can help your company implement, review, and/or improve its retirement plan, please contact Ted Haughey at 781-759-1222, ext. 150 or via email at info@CBGBenefits.com.