2015-2016 401k and IRA Limits

Posted by Madison on December 6, 2015

The 2016 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. The 2016 social security wage base will also stay the same.

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.

2015 & 2016 Contributions

Here are the 2015 & 2016 contribution limits for IRAs and 401ks:

401k Contributions 2015 2016
Maximum $ 18,000 $ 18,000
Catch-up 50 and over $ 6,000 $ 6,000
IRA Contributions 2015 2016
Maximum $ 5,500 $ 5,500
Catch-up 50 and over $ 1,000 $ 1,000

You can make your 2016 contributions as early as January 1 for the whole year. If you contribute 2016 IRA money between January 1 and April 15, be sure to designate calendar year 2016 if you have already contributed the maximum for 2015.

Since the 2016 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 Scottrade to avoid annual fees.

2015 Contributions

You can still make 2015 contributions before the end of the year for your 401k. 2015 IRA contributions can be made until April 15, 2016 the same as the tax deadline.

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Comments to 2015-2016 401k and IRA Limits

  1. The 401k contribution limits were increased as part of the 2001 tax cuts. These tax cuts are expiring unless they are extended. Are the contribution limits impacted by this? I know in 2006, the IRA increase from $2000 to $4000 was made permanent, but I’m not sure about the 401k limit.

    Brian

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