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IRS Announces Retirement Contribution Limits for 2016

The IRS has announced various contribution limits applicable to retirement plans in 2016.  Highlights include:

  • The elective deferral (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 employees aged 50 and over who participate in 401(k), 403(b), and most 457 plans remains unchanged at $6,000.
  • The limit on annual contributions to an Individual Retirement Arrangement (IRA) remains unchanged at $5,500. The additional catch-up contribution limit for individuals aged 50 and over is not subject to an annual cost-of-living adjustment and remains $1,000.
  • The limitation for defined contribution plans under Section 415(c)(1)(A) remains unchanged in 2016 at $53,000.
  • The limitation used in the definition of highly compensated employee under Section 414(q)(1)(B) remains unchanged at $120,000.

 

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