401(K) and Retirement Plan Limits for 2016 Tax Year

On October 21, 2015, the Internal Revenue Service announced cost of living adjustments affecting dollar limitations for pension plans and other retirement-related items for tax year 2016. In general, the pension plan limitations will not change for 2016 because the increase in the cost-of-living index did not meet the statutory thresholds that trigger their adjustment. However, other limitations will change because the increase in the index did meet the statutory thresholds.

Chart of Select Limits

401k Plan Limits for Year20162015201420132012
401k Elective Deferrals$18,000$18,000$17,500$17,500$17,000
Annual Defined Contribution       Limit$53,000$53,000$52,000$51,000$50,000
Annual Compensation Limit$265,000$265,000$260,000$255,000$250,000
Catch-Up Contribution Limit$6,000$6,000$5,500$5,500$5,500
Highly Compensated Employees$120,000$120,000$115,000$115,000$115,000
Non-401k Related Limits
403(b)/457 Elective Deferrals$18,000$18,000$17,500$17,500$17,000
SIMPLE Employee Deferrals$12,500$12,500$12,000$12,000$11,500
SIMPLE Catch-Up Deferral$3,000$3,000$2,500$2,500$2,500
SEP Minimum Compensation$600$600$550$550$550
SEP Annual Compensation Limit$265,000$265,000$260,000$255,000$250,000
Social Security Wage Base$118,500$118,500$117,000$113,700$110,100
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