Few Cost of Living Adjustments for Retirement and Health Plans for 2016
The IRS has released the cost-of-living adjustments (COLA) affecting dollar limitations for Individual Retirement Accounts (IRAs), defined contribution and other retirement-related items for tax year 2016. In general, most limits will remain unchanged for 2016 because the increase in the cost-of-living index did not meet the threshold that would trigger their adjustment.
The table below compares both the retirement plan and health insurance plan limits for 2014 through 2016, with items that have changed for 2016 asterisked. Further guidance can be found on the IRS website.
| Retirement Plans | 2014 Limit | 2015 Limit | 2016 Limit |
| IRA contribution limit | $5,500 | $5,500 | $5,500 |
| IRA catch-up contributions for ages 50+ | $1,000 | $1,000 | $1,000 |
|
IRA AGI Deduction Phase-Out Starting at |
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| Joint Return | $96,000 | $98,000 | $98,000 |
| Single or Head of Household | $60,000 | $61,000 | $61,000 |
| IRA contributor not covered by a workplace retirement plan, but filing joint return with spouse who is | $181,000 | $183,000 | $184,000* |
|
AGI Phase-Out for Contributions to Roth IRA |
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| Joint Return | $181,000 | $183,000 | $184,000* |
| Single or Head of Household | $114,000 | $116,000 | $117,000* |
| 401(k), 403(b), 457(b)(2) elective deferrals | $17,500 | $18,000 | $18,000 |
| 401(k), 403(b) “catch-up” contributions for ages 50+ | $5,500 | $6,000 | $6,000 |
| SIMPLE plan elective deferral | $12,000 | $12,500 | $12,500 |
| SIMPLE “catch-up” contributions for ages 50+ | $2,500 | $3,000 | $3,000 |
| Defined contribution plan maximum | $52,000 | $53,000 | $53,000 |
| Defined benefit plan maximum | $210,000 | $210,000 | $210,000 |
| Maximum includible compensation | $260,000 | $265,000 | $265,000 |
| Highly compensated employee | $115,000 | $120,000 | $120,000 |
| FICA taxable wage base | $117,000 | $118,500 | $118,500 |
| Health Insurance Plans | 2014 Limit | 2015 Limit | 2016 Limit |
| Health Savings Account (HSA) contribution limit — individual | $3,300 | $3,350 | $3,350 |
| HSA contribution limit — family | $6,550 | $6,650 | $6,750* |
| HSA “catch-up” contributions for ages 55+ | $1,000 | $1,000 | $1,000 |
| Minimum deductible for high-deductible health plan (HDHP) — individual | $1,250 | $1,300 | $1,300 |
| Minimum deductible for HDHP — family | $2,500 | $2,600 | $2,600 |
| Maximum out-of-pocket for HDHP — individual | $6,350 | $6,450 | $6,550* |
| Maximum out-of-pocket for HDHP — family | $12,700 | $12,900 | $13,100* |
| Flexible Spending Account (FSA) contribution limit | $2,500 | $2,500 | $2,550 |
*Represents change from 2015.
Required Attribution
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