Posted byon December 6, 2015
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The 2017 IRA limits and 401k contribution limits will not change. It’s time to start planning your contributions for next year.
The 401k limits and IRA limits are determined based on inflation, but can only increase in $500 increments.
However, the 2017 social security wage base increased by $8,700.
These are the limits for the traditional IRA and the 401k, although the Roth 401ks and IRA limits will be the same as the traditional 401k and traditional IRAs.
Here are the 2016 & 2017 contribution limits for IRAs and 401ks:
|Maximum||$ 18,000||$ 18,000|
|Catch-up 50 and over||$ 6,000||$ 6,000|
|Maximum||$ 5,500||$ 5,500|
|Catch-up 50 and over||$ 1,000||$ 1,000|
You can make your 2017 contributions as early as January 1 for the whole year. If you contribute 2017 IRA money between January 1 and April 18, be sure to designate calendar year 2017 if you have already contributed the maximum for 2016.
Since the 2017 limits will stay the same for both the IRA and the 401k, if you use automatic investments, you probably won’t have to make any changes. However, it’s always best to doublecheck your deferral rates.
To maximize your IRA investments, make sure you aren’t paying extra fees in your IRA. You can transfer your IRA to another broker to avoid annual fees. We use Vanguard for our IRAs.
2016 IRA contributions can be made until April 18, 2017, the same as the tax deadline.
401k contribution deadlines are based on the calendar year. 2016 401k contributions were due at the end of the year.