What’s New and How Does it Impact You? Retirement Plan Contribution Limits for 2017.
There were few changes to the retirement contribution limits for 2017.
IRA and Roth IRA limits remain the same. The maximum an individual with earned income can contribute is $5,500 split any way they want between traditional and Roth IRAs. An individual age 50 or older during the year can contribute an additional $1,000 for a total contribution of $6,500.
The contribution limits for 401(k) and 403(b) plan participants also remain the same. The maximum a participant can defer to a plan and/or the Roth component or a plan remains at $18,000. Plan participants who are age 50 or older during the year can defer an additional $6,000 for a total deferral of $24,000.
The SIMPLE IRA contribution limits also remain the same. A participant can defer $12,500 for the year. If they are age 50 or older during the year, they can defer an additional $3,000 for a total deferral of $15,500.
SEP contribution limits have increased $1,000 to a maximum contribution of $54,000. The limit is 25% of compensation capped at $270,000. This limit also applies to Keogh plans and profit sharing plans. There are no catch-up contributions for participants age 50 or older.
There are some changes in the phase-out ranges for deductibility of IRA contributions and the ability to make Roth IRA contributions.
The deductibility limits for most individuals eligible to make IRA contributions have slight increases. If you are married filing jointly, the ability to deduct an eligible IRA contribution phases out between $99,000 and $119,000. For those filing as single or head of household, the phase-out range is now $62,000 – $72,000. For those who are married filing separate the phase-out range remains $0 – $10,000.
The income limits for making Roth IRA contributions have also increased slightly. For those who file married/joint, the ability to make an eligible Roth IRA contribution phases out between $186,000 – $196,000. If you file as single or head of household, the phase out range for making eligible Roth IRA contributions is now $118,000 – $133,000. For those who are married filing separate the phase-out range remains $0 – $10,000.