New 401(k) limits for 2016

November 05, 2015 By David Cash

New 401k Limits For 2016On October 21, 2015 the IRS released the Cost of Living Adjusted limits for retirement plans for the 2016 calendar year.

The limits are unchanged from the 2015 calendar year and are:

  • 401(k) employee contribution limit of $18,000
  • 401(k) employee catch up contribution amount of $6,000 (for those age 50 or over)
  • The IRA annual contribution limit of $5,500
  • The IRS catch up contribution amount of $1,000 (for those age 50 or over)
  • Total Section 415(c)(1)(A) contribution limits for Defined Contribution plans remains at $53,000 plus the $6,000 catch up for those 50 or over (if applicable)
  • Annual compensation limit taken into account for Defined Contribution plans remains unchanged at $265,000 of Plan compensation
  • The income limitation for the Highly Compensated Employee definition is unchanged at $120,000

Here is a link to the official IRS release on these and other limitations for the 2016 calendar year: https://www.irs.gov/uac/Newsroom/IRS-Announces-2016-Pension-Plan-Limitations;-401(k)-Contribution-Limit-Remains-Unchanged-at-$18,000-for-2016

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David Cash

David Cash

David or Dave is your stereotypical accountant who enjoys what he does. Dave has done some of just about everything in public accounting from financial statement auditing to tax compliance to pension design and administration.

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