Advice for Savvy Retirement Planning

401K Contribution Limits for 2017

401K Contribution LImitsEach year the IRS publishes updated Maximum 401K contribution limits, as well as catch-up contribution limits for the new year. Typically, the limits the IRS sets each year is based on inflation factors (with minimum $500 increases), so they do not necessarily increase the limit each year.

The 401K Max Contribution Limit for 2017 has now been set, with NO increases over 2016, and will remain at $18,000. The Maximum 401K contribution Limit for 2014 and 2015 was $17,500 and $18,000, respectively.

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IRA Contribution Limits 2017 and Previous Years

History of 401K Max Contribution Limits:

As you can see, the Maximum 401K contribution limits do not rise dramatically each year. Although over time, if investors are diligent about increasing their contributions, it can certainly make a difference. The limit on contributions for 401K, 403B, most 457 plans, and the Federal Government Thrift Savings Plan (TSP):

  • 2017 – $18,000
  • 2016 – $18,000
  • 2015 – $18,000
  • 2014 – $17,500
  • 2013 – $17,500
  • 2012 – $17,000
  • 2011 – $16,500
  • 2010 – $16,500
  • 2009 – $16,500
  • 2008 – $15,500

Age-50 401K Catch Up Maximum Contribution Limits

For those of you that are over age 50 (or turn age 50 before the end of the year), you are allowed an additional 401K catch-up contribution. These limits also adjust for inflation, but at a much slower pace. The $500 increase to $6,000 for 2015 was the first 401K catch up increase since 2009. For 2017, there is NO increase:

  • 2017 – $6,000
  • 2016 – $6,000
  • 2015 – $6,000
  • 2014 – $5,500
  • 2013 – $5,500
  • 2012 – $5,500
  • 2011 – $5,500
  • 2010 – $5,500
  • 2009 – $5,500
  • 2008 – $5,000

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Employer Match and Total Maximum 401K Contributions

In addition to total allowable employee 401K contributions, there is a maximum total contribution allowed into your 401K (when factoring in employer match). For 2017, the maximum allowed to be contributed into your 401K has increased from $53,000 to $54,000 (or 100% of income, whichever is greater) with minimum $1,000 increases thereafter. Therefore, with employee standard contributions, potential over-50 “catch-up” contributions, plus employer contributions, the maximum overall contributions are $60,000 in 2017.

For IRS Limits on Other Types of Retirement Plans (ie. SIMPLE, SEP, etc.), please see IRS Retirement Plans Guide

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Robert Henderson is the President of Lansdowne Wealth Management, an independent, fee-only advisory firm in Mystic, CT. His firm specializes in financial planning and investment management for retirement, with a special focus on the particular needs of women that are divorced or widowed. He is an Accredited Asset Management Specialist and a Certified Divorce Financial Analyst. Mr. Henderson can be reached at 860-245-5078 or bhenderson@lwmwealth.com. You can also view his personal finance blog, The Retirement Workshop at http://lwmwealth.com/blog and the firm’s website at http://www.lwmwealth.com.

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