The IRS announced today that the dollar limits applicable to tax-qualified retirement plans will not increase for 2016. This follows a recent announcement that there will be no cost of living increase in Social Security benefits next year. The tax-qualified retirement plan dollar limits for 2016 will remain as follows:
- The limit on the maximum amount of elective contributions that a person may make to a §401(k) plan, a §403(b) tax-sheltered annuity, or a §457(b) eligible deferred compensation plan is $18,000.
- The limit on "catch-up contributions" to a §401(k) plan, a §403(b) tax-sheltered annuity, or a §457(b) eligible deferred compensation plan for persons age 50 and older is $6,000.
- The dollar limit on the maximum permissible allocation under a defined contribution plan is $53,000.
- The maximum annual benefit under a defined benefit plan is $210,000.
- The maximum amount of annual compensation that may be taken into account on behalf of any participant under a qualified plan is $265,000.
- The dollar amount used to identify "highly compensated employees" is $120,000.
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