Last week the Internal Revenue Service (IRS) announced the various 2016 dollar limitations for retirement plan contributions and other retirement-related items based on its annual cost-of-living analysis and adjustments, and there are very few changes from 2015. According to the IRS, it implemented so few changes because the cost-of-living index did not meet statutory thresholds that trigger any adjustment.
Accordingly, the elective deferral limit for 401(k), 403(b), most 457 plans, and the government’s Thrift Saving Plan remains at $18,000. Likewise, the catch-up contribution limit for employees ages 50 and older who participate in these plans remains unchanged at $6,000 annually, and the limit on an Individual Retirement Arrangement (IRA) also remains unchanged at $5,500, with the catch-up contribution limit remaining at $1,000.
The following chart summarizes the 2016 retirement plan limits and other benefit plans. The 2015 limits are provided for reference purposes.
| 2015 | 2016 | |
| Elective Deferral Limit (401(k), 403(b), 457(b) | $18,000 | $18,000 |
| Catch-up Limit (age 509+) | $6,000 | $6,000 |
| Defined Benefit Limit | $210,000 | $210,000 |
| Defined Contribution Limit | $53,000 | $53,000 |
| Dollar Limit – Highly Compensated Employees | $120,000 | $120,000 |
| Officer-Key Employee | $170,000 | $170,000 |
| Annual Compensation Limit | $265,000 | $265,000 |
| SEP Eligibility Compensation Limit | $600 | $600 |
| SIMPLE Deferral Limit | $12,500 | $12,500 |
| SIMPLE Catch-up Limit (age 50+) | $3,000 | $3,000 |
| Social Security Taxable Wage Base | $118,500 | $118,500 |
| ESOP 5 Year Distribution Extension Account Minimum | $1,070,000 | $1,070,000 |
| Additional amount of 1 year extension | $210,000 | $210,000 |
| HSA (self/family) Maximum Annual Contribution | $3,350/$6,650 | $3,350/$6,750 |
| HDHP Minimum Deductible Limits | $1,300/$2,600 | $1,300/$2,600 |
| Out-of-pocket Expense Annual Maximum | $6,450/$12,900 | $6,550/$13,100 |
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