The IRS announced the contribution limits for retirement plans in 2017. And for the third year in a row, IRA and 401(k) savers won't see any change in the dollars they can set aside.
Since plan contribution levels are pegged to inflation, which has remained low, the maximum amount you can contribute in your 401(k) next year stays at $18,000. That level has been the same since 2015.
The limit on 401(k) catch-up contributions, which allow workers age 50 and older to put away more money, dooesn't budge either—it's $6,000 for 2017.
For IRAs, it's a similar story: You can make a maximum annual contribution of $5,500, which is the same as the last two years, and catch-up contributions stay at $1,000.
There are a few retirement plan limits that do change in 2017—mainly the maximum amount of income you can earn and still contribute to a Roth IRA, as well as income limits for taking a tax deduction on contributions to a traditional IRA.
The Roth IRA income phase-out range for married couples filing jointly is $186,000 to $196,000, up from $184,000 to $194,000. For singles and heads of household the range has also increased, to $118,000 to $133,000. If your income falls in or above those brackets, the amount you can contribute to a Roth is reduced or phases out entirely. Still, anyone with earned income can make a nondeductible contribution to a traditional IRA.
If you don't have an employer retirement plan but your spouse is covered by one, and your combined household income is less than $186,000, you'll be able to take a full deduction up to the limits on your traditional IRA contribution. If you earn between $186,000 and $196,000, you can take a partial deduction, and if you make more than $196,000, you won't be able to take a deduction at all. Those thresholds have gone up from $184,000 and $194,000 for 2016.
The maximum income you can earn and still qualify for a saver’s credit, or "retirement savings contribution credit," is now $62,000 for married couples filing jointly, up from $61,500 in 2016. It's $46,500 for heads of household and $31,000 for singles, up from 2016 levels of $46,125 and$30,750, respectively.