The limits to be aware of regarding your 401k are the two annual limits that apply to contributions. The first is a limit on deferrals regarding employee elective contributions, and the second is the full limit placed on the contributions anyone makes into a single plan, including the total of employer contributions.

In October 2016, the IRS revealed the cost of living adjustments that would be made to effect the dollar limitations placed on pension plans and other retirement items for the tax year of 2017. Here, we will take a look at the 401k contribution limits 2017, as well as the additional limits in place for other saving solutions.

There are many circumstances that remain unchanged from 2016. These include the contribution limit that has been provided for employees that participate in 401k plans, as well as 403(b) plans, and many 457 plans, as well as the thrift savings plan implemented by the government. These limits are still at $18,000.

What’s more, the catch-up contribution limit for employees over the age of 50 that participate in 401k plans is also unchanged at $6,000. Similarly, the limit that has been imposed on annual contributions to an IRA will remain unchanged at around $5,500. The additional catch-up contribution limits for people aged fifty and over is not subject to the cost of living adjustments.

Other Pension Changes:

The 401k contribution limits 2017 remain the same. However, the changes to be aware of revolve around the income ranges that are used for determining the eligibility any individual has to make in deductible contributions to their IRAs.

Taxpayers can take contributions out to a traditional IRA if certain circumstances are met. For instance, if during the year, the taxpayer or spouse was covered by a specific retirement plan at work, then this deduction might be phased out or reduced until it is eliminated completely depending on their income and filing status.

Changing 401k Contribution Limits 2017:

For many pension owners, it is interesting to learn that the IRS has left the maximum employee contribution alone for the third year running. Every year, in October, the contribution limits for 401ks are reviewed. The maximum contribution for 2017 has remained virtually unchanged since 2015 and 2016. What’s more, the situation remains the same with catch-up contributions.

Contribution limits increase more frequently during years when the inflation rate in general is higher within the U.S. At the same time, the contribution rates and regulations that we experience get lower when the inflation rate is lower. The inflation rate has been particularly low over the past few years, and at times there have been a number of concerns regarding the fact that the contribution limits may be reduced based on this rate.

Fortunately, although the contribution rates have not yet improved, they have not gotten any worse, and this is a relief for many individuals that are currently paying into 401k plans. The limits have been either increased slightly over recent years or left completely flat, which is far better than a reduction in the contribution limits.