by P.J. DiNuzzo December 15, 2016
Retirement Contribution Limits Unchanged
In case you missed it, the contribution limits to your 401(k) plan, IRA and Roth IRA-set by the government each year based on the
inflation rate-will not go up in 2017. Just like this year, you will be able to defer up to $18,000 of your paycheck to your 401(k), and individuals over age 50 will still be able to make a "catch-up" contribution of an additional $6,000. (The same limits apply to 403(b) plans and the federal government's new Thrift Savings Plan.) Your IRA and Roth IRA contributions will continue to max out at $5,500, plus a $1,000 "catch-up" contribution for persons 50 or older.
SEP IRA and Solo 401(k) contribution limits, meanwhile, will go up from $53,000 this year to $54,000 in 2017.
The government has made small changes to the income limits on who can make deductions to a Roth IRA and who can claim a deduction for their contribution to a traditional IRA. The phase out schedule for single filers for 2016 starts at $117,000 and contributions are entirely phased out at $132,000; for joint filers the current range is $186,000 to $196,000. In 2017, the single phase out will run $1,000 higher, from $118,000 to $133,000, and the joint phase out threshold will rise $2,000, to $188,000 up to $198,000. Single persons who have a retirement plan at work will see the income at which they can no longer deduct their IRA contributions go up $1,000 as well, with the phase out starting at $62,000 and ending at $72,000. Couples will see their phase out schedule rise to $99,000 to $119,000.
Sincerely,
P.J. DiNuzzo, CPA, PFS®, AEP®, AIF®, MBA, MSTx
President, Founder, and Chief Investment Officer