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On October 27th, 2016 the IRS announced its annual increases (or lack of increases) to retirement plan contribution limits.

Highlights are listed below:

Traditional IRA Deduction Limits:

  1. For single taxpayers covered by a workplace retirement plan, the phase-out range is $62,000 to $72,000, up from $61,000 to $71,000.
  2. For married couples filing jointly, where the spouse making the IRA contribution is covered by a workplace retirement plan, the phase-out range is $99,000 to $119,000, up from $98,000 to $118,000.
  3. For an IRA contributor who is not covered by a workplace retirement plan and is married to someone who is covered, the deduction is phased out if the couple’s income is between $186,000 and $196,000, up from $184,000 and $194,000.
  4. For a married individual filing a separate return who is covered by a workplace retirement plan, the phase-out range is not subject to an annual cost-of-living adjustment and remains $0 to $10,000.

Roth IRA Contribution Income Phase-Outs:

  1. $118,000 to $133,000 for singles and heads of household, up from $117,000 to $132,000.
  2. For married couples filing jointly, the income phase-out range is $186,000 to $196,000, up from $184,000 to $194,000.
  3. Don’t forget to ask your financial planner about “back-door” Roth IRA contributions if your income exceeds these thresholds and you want to contribute to a Roth IRA!

Unchanged Contribution Limits:

  1. The contribution limit for employees who participate in 401(k), 403(b), most 457 plans, and the federal government’s Thrift Savings Plan remains unchanged at $18,000.
  2. The catch-up contribution limit for employees aged 50 and over who participate in 401(k), 403(b), most 457 plans, and the federal government’s Thrift Savings Plan remains unchanged at $6,000.
  3. The limit on annual contributions to an IRA remains unchanged at $5,500. The additional catch-up contribution limit for individuals aged 50 and over is not subject to an annual cost-of-living adjustment and remains $1,000.

Source:  IRS newswire

Steve joined Planning Solutions Group in 2015 and specializes in providing comprehensive financial plans to high-net worth individuals and families. During his career he has realized that his true passion is for building long-term relationships with clients and helping them through the various financial challenges they may face. Steve’s mission is to act as a true advocate for his client’s financial well-being. Prior to joining Planning Solutions Group, Steve spent four years as a CERTIFIED FINANCIAL PLANNER™ with Keeney Financial Group in Columbia, MD. He has also had the privilege of working for Convergent Wealth Advisors, Legg Mason and NVR, Inc. Steve currently holds the prestigious CFP® designation and has his FINRA series 7 and life and health insurance licenses. In addition to providing clarity and confidence in all financial matters to his clients, Steve is passionate about giving back to the community. He currently lives in Baltimore City with his new wife and spends his free time rock climbing, travelling, cooking and volunteering with The Associated, a Jewish Philanthropic organization. To email Steve:sstern@psgplanning.com