2016 Retirement Plans Contribution Limits
2016 Retirement Plan Contribution Limits
Below are the cost-of-living adjustments that apply to the dollar limits on contributions and benefits under qualified retirement plans, IRAs and HSAs for years beginning after December 31, 2015. With the exception of the HSA Family Contribution and the HSA Maximum Out-of-Pocket Limits, there has been no change from 2015 to 2016.
SEP IRA, Money Purchase and Profit Sharing Maximum Contribution
-
The maximum dollar amount that can be contributed remains unchanged at $53,000.
-
The cap on compensation remains unchanged at $265,000 (see ‘Qualified Plan Compensation Limitation’ below).
With the deductible contribution limit remaining at 25% this year, many profit sharing, money purchase and SEP IRA plan participants will be eligible to receive a $53,000 contribution.
Employee Contribution Maximums (401(k), SIMPLE, 403(b) and 457)
-
The SIMPLE IRA maximum salary deferral amount remains unchanged at $12,500, and the catch-up contribution for individuals age 50 and older also remains unchanged at $3,000.
-
The 457 plan (a deferred compensation plan for a state or local government employer) maximum salary deferral amount remains unchanged at $18,000.
- The 401(k) and 403(b) maximum salary deferral amount remains unchanged at $18,000, with a catchup contribution amount also remaining unchanged at $6,000.
Qualified Plan Compensation Limit
The maximum amount of an employee’s compensation that can be considered when calculating contributions to a plan remains unchanged at $265,000. For example, if an employer contributes 10% of each employee’s pay to a profit sharing plan, an employee earning $300,000 would receive a $26,500 contribution (10% of $265,000).
Highly Compensated Employee Determination
The highly compensated employee limitation remains unchanged at $120,000.
SEP IRA Employee Eligibility and SIMPLE IRA Employee Eligibility
The maximum amount of income that an employer can require for employee SEP IRA plan eligibility remains unchanged at $600.
The maximum amount of income that an employer can require for employee SIMPLE IRA plan eligibility remains unchanged at $5,000.
Defined Benefit Plan Maximum Benefit
The limit on the annual benefit under a defined benefit plan remains unchanged at $210,000
Traditional and Roth IRAs
The 2016 IRA Contribution limit remains unchanged at $5,500 with a catch-up contribution also remaining unchanged at $1,000.
Health Savings Accounts
The 2016 inflation adjusted indexed numbers for Health Savings Accounts (HSAs) have increased. They are:
| Contribution Limits | 2016 | 2015 |
| Individuals | $3,350 | $3,350 |
| Families | $6,750 | $6,650 |
| Catch-up age 55+ | $1,000 | $1,000 |
| Maximum Out-of-Pocket | ||
| Individuals | $6,550 | $6,450 |
| Families | $13,100 | $12,900 |
| Minimum Deductible | ||
| Individuals | $1,300 | $1,300 |
| Families | $2,600 | $2,600 |
Pension Plan Limit History
401(k) Plan Limits for Plan Year
| 2016 | 2015 | 2014 | 2013 | |
| 401(k) Elective Deferrals | $18,000 | $18,000 | $17,500 | $17,500 |
| Annual Defined Contribution Limit | $53,000 | $53,000 | $52,000 | $51,000 |
| Annual Compensation Limit | $265,000 | $265,000 | $260,000 | $255,000 |
| Catch-Up Contribution Limit | $6,000 | $6,000 | $5,500 | $5,500 |
| Highly Compensated Employees | $120,000 | $120,000 | $115,000 | $115,000 |
Non-401(k) Related Limits
| 2016 | 2015 | 2014 | 2013 | |
| SIMPLE Employee Deferrals | $12,500 | $12,500 | $12,000 | $12,000 |
| SIMPLE Catch-Up Deferrals | $3,000 | $3,000 | $2,500 | $2,500 |
| SEP Minimum Compensation | $600 | $600 | $550 | $550 |
| SEP Annual Compensation Limit | $265,000 | $265,000 | $260,000 | $255,000 |
Contact your Oppenheimer & Co. Inc. Financial Advisor for more information!
The information contained herein is general in nature, has been obtained from various sources believed to be reliable and is subject to changes in the Internal Revenue Code, as well as other areas of law. Oppenheimer & Co. Inc. does not provide legal or tax advice. Please contact your legal or tax advisor for specific advice regarding your circumstances.