On October 21, 2015, the Internal Revenue Service announced 2016 retirement plan contribution limits. In general, the pension plan contribution amounts (401(k) and IRAs) will not change for 2016 because the increase in the cost-of-living index did not meet the statutory thresholds that trigger their adjustment.
Highlights for 401(k) plans and IRAS for 2016 include:
The 401(k) "employee" elective deferral contribution piece (either the tax-deductible contribution or the non-deductible Roth contribution) remains at $18,000;
The 401(k) "catch-up" contribution limit for employees aged 50 and over remains unchanged at $6,000. The catch-up contribution is a part of the employee elective contribution, so the total employee elective contribution for those over age 50 is $24,000 ($18,000 + $6,000). Remember, any or all of the total employee elective contribution can be a non-deductible Roth contribution.
The total annual contribution limit (this is the combination of the employee elective contribution plus the employer profit sharing contribution) for defined contribution plans (401(k) plans) remains at $53,000. For those over the age of 50, this maximum contribution amount remains at $59,000 (the $53,000 contribution limit plus the age 50 + "catch-up" contribution of $6,000).
Individual Retirement Arrangement (IRA) annual contributions remain unchanged at $5,500.
The additional "catch-up" contribution limit for individuals aged 50 and over remains at $1,000.