2015 Retirement Plan Contribution Limits

Recently, the Treasury Department announced inflation-adusted contribution limits for retirement accounts for 2015. The good news is that contributions were increased for 401(k), SEP-IRA and SIMPLE plans. Depending on your age, you can put away $18,000 – $24,000 into a 401(k).

401(k)
The annual contribution limit for employees who participate in 401(k), 403(b), and most 457 plans, increases to $18,000 for 2015, up from $17,500 in 2014. For employees age 50 and older, the catch-up contribution limit for 2015 has been increased to $6,000 up from $5,500. You’re eligible for the additional catch-up contribution as long as you turn 50 by December 31, 2015.

SEP IRA and Solo 401(k)
These plans are for the self-employed and small business owners. The annual contribution limit for individuals who participate in a SEP IRA or a Solo 401(k) increases to $53,000 for 2015, up from $52,000 in 2014. For business owners who receive their income through a W-2, the new compensation limit used in the contribution calculation is $265,000, up from $260,000.

SIMPLE IRA
The annual contribution limit for SIMPLE retirement accounts increases to $12,500, up from $12,000 in 2014. The catch-up contribution limit for 2015 is $3,000, up from $2,500 in 2014.

Defined Benefit Plans
The limitation on the annual benefit of a defined benefit plan remains unchanged at $210,000 in 2014. These plans are commonly utilized by higher earning self-employed individuals.

IRA
For the third year in a row, the annual contribution limit to an Individual Retirement Account is $5,500. Also, the catch-up contribution remains the same at $1,000.

Traditional IRA Phase-Outs
However, the adjustable gross income (AGI) phase-outs for traditional IRAs are increased slightly. For married couples filing jointly, in which the spouse who makes the IRA contribution is covered by a workplace retirement plan, the income phase-out range is $98,000 to $118,000, up from $96,000 to $118,000. For an IRA contributor who is not covered by a workplace retirement plan and is married to someone who is covered, the deduction is phased out if the couple’s income is between $183,000 and $193,000, up from $181,000 and $191,000. For singles and heads of household who are covered by a workplace retirement plan, the income phase-out range is $61,000 to $71,000, up from $60,000 and $70,000 in 2014.

ROTH IRA Phase-Outs
In 2015, the AGI phase-out range for taxpayers making contributions to a Roth IRA is $183,000 to $193,000 for married couples filing jointly, up from $181,000 to $191,000 in 2014. For singles and heads of household, the income phase-out range is $116,000 to $131,000, up from $114,000 to $129,000.

Source:  Forbes, IRS Announces 2015 Retirement Plan Contribution Limits For 401(k)s And More, Ashlea Ebeling, 10/23/14.