2016 Qualified Plan Contribution/Benefit Limitations:
| Type of Plan | Maximum Deductible 2016 Contributions/Benefits (only the first $265,000 of compensation can be used in applying these limits) |
| Money Purchase Pension Plan | Annual additions cannot exceed the lesser of 100% of the participant’s compensation or $53,000. |
| Profit-Sharing Plan | Annual additions to individual plan participants cannot exceed the lesser of 100% of the participant’s compensation or $53,000. |
| 401(k) Plan | Employer contributions: Up to 15% of covered payroll. Elective employee deferrals: $18,000 ($24,000 if age 50 or older) Allocation limits: Total of employer contributions and elective employee deferrals cannot exceed the lesser of 100% of a participant’s compensation or $53,000. |
| Simplified Employee Pension (SEP) Plan | Annual additions cannot exceed the lesser of 25% of the participant’s compensation or $53,000. |
| SIMPLE Plan (401(k) or IRA) | Maximum annual salary reduction deferral: $12,500 ($15,500 if age 50 or older) |
| Target Benefit Pension Plan | Annual additions cannot exceed the lesser of 100% of the participant’s compensation or $53,000. |
| Defined Benefit Pension Plan | Benefit provided cannot exceed the lesser of 100% of the average of the participant’s highest three consecutive years of compensation or $210,000. |
| Tax-Sheltered Annuity | Maximum annual salary reduction: $18,000 ($24,000 if age 50 or older) |
| Section 457 Plan | Maximum annual deferral: $18,000 ($24,000 if age 50 or older) |
| NOTE: | Withdrawals from a qualified plan prior to age 59-1/2 may be subject to a 10% early withdrawal penalty, as well as taxation. |
Are you taking full advantage of the power of tax deductions and tax-deferred accumulations in your retirement planning?
by The Virtual Assistant; © 2016 VSA, LP
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