The IRS has issued cost-of-living adjustments (or “COLAs”) for 2017. If, like most people, you’re funding a retirement plan, it’s a good idea to take a look at what’s changed and what hasn’t.
Elective deferrals to 401(k), 403(b), 457(b)(2) and 457(c)(1) plans will remain the same at $18,000. Likewise, contributions to SIMPLEs stay unchanged at $12,500, and contributions to IRAs remain static at $5,500. Catch-up contributions stay the same, as well — $6,000 for 401(k), 403(b), 457(b)(2) and 457(c)(1) plans; $3,000 for SIMPLEs; and $1,000 for IRAs.
The annual benefit for defined benefit plans rises from $210,000 to $215,000. Meanwhile, contributions to defined contribution plans go from $53,000 to $54,000.
Please note: Your modified adjusted gross income (MAGI) may reduce or even eliminate your ability to take advantage of IRAs. Fortunately, IRA-related MAGI phaseout range limits all will increase for 2017. Please contact our firm for these specific amounts.
For a full list of dollar limitations for pension plans and selected other items, see this BDO USA document.
We can also help you better understand other important COLA amounts — including those related to ordinary-income tax brackets, the alternative minimum tax, education- and child-related breaks, and gift and estate taxes.