IRS Announces Pension Plan Limits for 2017Submitted by Karstens Investments on November 17th, 2016
By Mark E. Johnson, AIFA®
On October 27th, the IRS announced cost of living increases for dollar limitations on pension plans and other retirement savings accounts. For employees participating in a 401(k), 403(b), 457 or a federal government Thrift Savings plan the annual elective contribution maximum remains unchanged at $18,000 for 2017. The catch-up contribution limit for individuals that will attain 50 years or older in 2017 also remains unchanged at $6,000. The annual additions limitation for all employer and employee contributions made on an employee’s behalf during the calendar year has increased to $54,000 for 2017. The maximum compensation amount allowed to be considered for benefit purposes has also increased to $270,000. Lastly, the contribution maximum for SIMPLE plans remains unchanged at $12,500 and $3,000 for catch-up contributions.
The dollar limits for contributions to IRAs remain unchanged at $5,500 and $1,000 for IRA catch-up contributions. A few of the income limitations applicable to phase-out provisions for IRAs and Roth IRAs have increased slightly from 2016 levels.
You should consult your advisor for information regarding your specific situation when planning for the new year.