Retirement Planning Key Numbers

Certain retirement plan and IRA limits are indexed for inflation each year, but only a few of the limits eligible for a cost-of-living adjustment (COLA) have increased for 2017. Some of the key numbers for 2017 are listed below, with the corresponding limit for 2016. (The source for these 2017 numbers is IRS Information Release IR-2016-141.)

Elective deferral limits

2016 2017
401(k) plans, 403(b) plans, 457(b) plans, and SAR-SEPs1(includes Roth contributions) Lesser of $18,000 or 100% of participant’s compensation ($24,000 if age 50 or older)2 Lesser of $18,000 or 100% of participant’s compensation ($24,000 if age 50 or older)2
SIMPLE 401(k) plans and SIMPLE IRA plans1 Lesser of $12,500 or 100% of participant’s compensation ($15,500 if age 50 or older) Lesser of $12,500 or 100% of participant’s compensation ($15,500 if age 50 or older)

IRA contribution limits

2016 2017
Traditional and Roth IRAs Lesser of $5,500 or 100% of earned income ($6,500 if age 50 or older) Lesser of $5,500 or 100% of earned income ($6,500 if age 50 or older)

Defined benefit plan annual benefit limits

2016 2017
Annual benefit limit per participant Lesser of $210,000 or 100% of average compensation for highest three consecutive years Lesser of $215,000 or 100% of average compensation for highest three consecutive years

Defined contribution plan limits (qualified plans, 403(b) plans, and SEP plans)

2016 2017
Annual addition limit per participant (employer contributions; employee pretax, after-tax, and Roth contributions; and forfeitures) Lesser of $53,000 or 100% (25% for SEP) of participant’s compensation Lesser of $54,000 or 100% (25% for SEP) of participant’s compensation

1 Must aggregate employee deferrals to all 401(k), 403(b), SAR-SEP, and SIMPLE plans of all employers; 457(b) contributions are not aggregated. For SAR-SEPs, the percentage limit is 25% of compensation reduced by elective deferrals (effectively a 20% maximum contribution).

2 Special catch-up limits may also apply to 403(b) and 457(b) plan participants.

Retirement plan compensation limits 2016 2017
Maximum compensation per participant that can be used to calculate tax-deductible employer contribution (qualified plans/SEPs)

$265,000

$270,000

Compensation threshold used to determine a highly compensated employee

$120,000 (when 2016 is the look-back year)

$120,000 (when 2017 is the look-back year)

Compensation threshold used to determine a key employee in a top-heavy plan

$1 for more-than-5% owners

$170,000 for officers

$150,000 for more-than-1% owners

$1 for more-than-5% owners

$175,000 for officers

$150,000 for more-than-1% owners

Compensation threshold used to determine a qualifying employee under a SIMPLE plan

$5,000

$5,000

Compensation threshold used to determine a qualifying employee under a SEP plan

$600

$600

 Income phaseout range for determining deductibility of traditional IRA contributions for taxpayers: 2016 2017

1. Covered by an employer-sponsored plan and filing as:

  Single/Head of household

$61,000 – $71,000

$62,000 – $72,000

  Married filing jointly

$98,000 – $118,000

$99,000 – $119,000

  Married filing separately

$0 – $10,000

$0 – $10,000

2. Not covered by an employer-sponsored retirement plan, but filing joint return with a spouse who is covered by a plan

$184,000 – $194,000

$186,000 – $196,000

Income phaseout range for determining ability to fund a Roth IRA for taxpayers filing as: 2016 2017

  Single/Head of household

$117,000 – $132,000

$118,000 – $133,000

  Married filing jointly

$184,000 – $194,000

$186,000 – $196,000

  Married filing separately

$0 – $10,000

$0 – $10,000

 

IRS Circular 230 disclosure: To ensure compliance with requirements imposed by the IRS, we inform you that any tax advice contained in this communication (including any attachments) was not intended or written to be used, and cannot be used, for the purpose of (i) avoiding tax-related penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any matter addressed herein.

Prepared by Broadridge Investor Communication Solutions, Inc. Copyright 2018

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