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Corporate Retirement Plan and IRA Limits For 2017

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On October 27, 2016, the IRS announced the 2017 pension plan limitations in Notice 2016-62. Importantly, the 2017 contribution limits for 401(k), 403(b) and governmental 457(b) remain unchanged at $18,000 and the age 50 catch-up limit remains unchanged at $6,000. Other selected dollar limits from 2015 – 2017 are summarized in the charts below.

 

 

Employer Retirement Plans – Contribution Limits

  2017 2016 2015
Employee contribution limit for 401(k), 403(b) or 457 plans $18,000 $18,000 $18,000
Catch-up contribution limit for 401(k), 403(b) or 457 plans, if age 50 or over $6,000 $6,000 $6,000
Maximum annual benefit payable by a defined benefit pension plan $215,000 $210,000 $210,000
Limit on combined employer and employee contributions to a defined contribution plan $54,000 $53,000 $53,000
Contribution limit to an IRA $5,500 $5,500 $5,500
Catch-up contribution limit for IRA, for individuals age 50 or over $1,000 $1,000 $1,000
Employee contribution for SIMPLE plans $12,500 $12,500 $12,500
Catch-up employee contribution for SIMPLE plans, if employee is age 50 and over $3,000 $3,000 $3,000
Annual Compensation Limit $270,000 $265,000 $265,000

 

Income Limits for Tax Deductions (Traditional IRA)

The income limits for determining the deductibility of traditional IRA contributions have increased (for those covered by employer retirement plans). For example, if you’re married and filing a joint return, you can fully deduct your IRA contribution if your MAGI is $99,000 or less. If you’re not covered by an employer plan but your spouse is, and you file a joint return, the deduction is phased out if the couple’s MAGI is between $186,000 and $196,000.

If your federal income tax filing status is: The deduction is phased out if the MAGI is between:
Single or head of household $62,000 and $72,000
Married filing jointly or qualifying widow(er) $99,000 and $119,000 (combined)

 

Income Limits for Tax Deductions (Roth IRA)

The income limits have increased for determining how much you can contribute to a Roth IRA. If your filing status is single/head of household and your MAGI is less than $117,000 you can contribute the full $5,500 to a Roth IRA. If you’re married and filing a joint return, you can make a full contribution if your MAGI is less than $184,000. Contributions can not exceed 100% of your earned income.

If your federal income tax filing status is: The deduction is phased out if the MAGI is between:
Single or head of household $118,000 and $133,000
Married filing jointly or qualifying widow(er) $186,000 and $196,000 (combined)

Disclosure:  Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific investment, or investment strategy. Investments involve risk and are not guaranteed.  Information has been gathered from sources believed to be reliable, but cannot be represented as accurate or complete.  Before investing, you should consult your investment, tax, or legal advisor.

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Investment advisory services offered through Lumin Financial LLC, which is an independent Registered Investment Adviser. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any securities. Investments involve risk and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed on this site.