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Retirement Planning

Ms. Jones can help you reach your financial goals and maintain financial independence with a comfortable retirement. The retirement plan tax laws are complex and constantly changing.  She can guide you through the tough decision-making process. Ms. Jones can advise you on the tax implications of your options so that you will save money

Some of the important limits for 2016 are below.

Elective deferrals

individuals participating in 401(k)s, 403(b)s, 457(b)s, or SAR-SEP plans, can make elective deferrals of up to $18,000 in 2016.  If you're age 50 or older, you also can make a catch-up contribution of up to $6,000 to these plans in 2016. (Special catch-up limits apply to certain participants in 403(b) and 457(b) plans.)

If your 401(k) or 403(b) plan allows Roth contributions, your total elective contributions, pretax and Roth, can't exceed $18,000 ($24,000 with catch-up contributions). 

If you participate in a SIMPLE IRA or SIMPLE 401(k) plan, you can contribute up to $12,500 in 2016.  If you're age 50 or older, the maximum catch-up contribution to a SIMPLE IRA or SIMPLE 401(k) plan in 2016 is $3,000.

IRA limits remain the same for 2016

The amount you can contribute to a traditional or Roth IRA is $5,500 (or 100% of your earned income, if less) for 2016, and the maximum catch-up contribution for those age 50 or older remains at $1,000. 

Some other key numbers for 2016

For 2016, the maximum amount of compensation your employer can take into account when calculating contributions and benefits in qualified plans (and certain other plans) is $265,000.

The maximum annual benefit you can receive from a defined benefit pension plan is limited to $210,000 in 2016.

And the maximum amount that can be allocated to your account in a defined contribution plan (for example, a 401(k) plan or profit-sharing plan) in 2016 is $53,000, plus age-50 catch-up contributions. (This includes both your contributions and your employer's contributions. Special rules apply if your employer sponsors more than one retirement plan.)

Income phaseout range for determining deductiibility of traditional IRA contributions in 2016

1. Covered by an employer plan: 
Single/head of household     $61,000-$71,000 
Married filing jointly               $98,000-$118,000 
Married filing separately                $0-$10,000 

2. Not covered by an employer plan, but filing joint return with a spouse who is covered $184,000-$194,000 

Income phaseout range for determining ability to fund Roth IRA in 2016

Single/head of household     $117,000-$132,000 
Married filing jointly               $184,000-$194,000 
Married filing separately                $0-$10,000 

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