News Room

January 5, 2016

2016 Retirement Plan Limits

Limits that Affect Your Retirement Plan

The IRS announces the Cost-Of-Living Adjustments to various retirement plan limits annually. The Social Security Administration also announces the Taxable Wage Base each year. The key 2016 Retirement Plan Limits (compared to the 2013, 2014, & 2015 limits) are presented below.

Limit2016201520142013
401(k) and 403(b) Elective Deferrals

(amount of salary an eligible employee can defer into a 401(k) or 403(b) plan)

$ 18,000$ 18,000$ 17,500$ 17,500
Catch-up Contributions

(amount an eligible employee who turns 50+ in the plan year can contribute in addition to the 401(k) Elective Deferral)

6,0006,0005,5005,500
DC Maximum Contribution

(maximum annual contribution a participant can receive under a 401(k)/Profit Sharing plan, not including Catch-up contributions)

53,00053,00052,00051,000
DB Maximum Annual Benefit

(maximum annual benefit a participant can receive from a Defined Benefit plan at age 62; larger annual benefit possible after age 65)

210,000210,000210,000205,000
Compensation Limit

(maximum compensation used to determine benefits under a qualified retirement plan)

265,000265,000260,000255,000
Highly Compensated Employee Compensation

(compensation earned in prior year used to determine if a participant is Highly Compensated – e.g. if someone earns over $120,000 in 2015 they are an HCE in 2016)

120,000120,000115,000115,000
Key Employee (Officer) Compensation

(compensation earned in prior year used to determine if a participant is a Key Employee)

170,000170,000170,000165,000
Social Security Wage Base
Social Security Taxable Wage Base$118,500$118,500$117,000$113,700