Retirement Plan Contribution Limits for 2015

Want to save more for retirement? Higher annual contribution limits for 401(k), 403(b), 457 and Thrift Savings plans should make it a bit easier to do so in 2015. Catch-up contributions for savers over age 50 have also increased, but contribution limits for traditional and Roth IRAs will stay the same. [Tweet "If you participate in a 401(k), you can contribute $18,000 in 2015."]

Save More in Your 401(k)

Here's what you need to know about retirement account contribution limits for 2015:

  • If you participate in a 401(k), 403(b), 457 or Thrift Savings plan, you can contribute $18,000 in 2015, a $500 increase from 2014.
  • If you are over age 50 and participate in a 401(k) or similar plan, you can also make a catch-up contribution of $6,000, which is $500 more than this year.
  • Annual contributions to traditional and Roth IRAs are still capped at $5,500 a year, plus a $1,000 catch-up contribution for those over age 50.

Changes to IRA Phaseout Ranges

While IRA contribution limits haven't changed, the IRS has increased the income limits at which people lose the ability to make contributions to traditional and Roth IRAs.

  • If you are able to contribute to a retirement plan at work, you lose the ability to deduct traditional IRA contributions when your modified adjusted gross income (AGI) reaches between $61,000 and $71,000, if you are single (an increase from $60,000 and $70,000 in 2014). The income phaseout range for couples who are married filing jointly is $98,000 to $118,000, up from $96,000 to $116,000 in 2014.
  • The income phaseout range for contributing to a Roth IRA if you are single or the head of a household is $116,000 to $131,000, up from $114,000 to $129,000 in 2014. For married couples filing jointly, the phaseout range is $183,000 to $193,000, up from $181,000 to $191,000 in 2014.

What This Means for You

If you're already contributing the maximum amount to your 401(k), you may want to adjust to your automatic contributions to take advantage of the higher limits. You'll also want to pay close attention if your modified AGI is close to the phaseout ranges for either deducting your IRA contributions or contributing to a Roth. That's because if you over-contribute to an IRA, you may have to pay a penalty if you don't correct the error in a timely manner.

To find out more about changes to retirement plan contribution limits and related issues, see the IRS website.