Contribution Limits

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Virtually every investment plan has a contribution limit of some sort, and these limits change over time. This page will keep the site up-to-date by acting as a contribution limit quick-reference for accounts of all types.

Individual Retirement Arrangements[edit]

The Roth IRA annual contribution limit remains at $5,500 for 2015.

Contribution Year Age 49 and Below Age 50+
1998–2001 $2,000 $2,000
2002–2004 $3,000 $3,500
2005 $4,000 $4,500
2006–2007 $4,000 $5,000
2008–2012 $5,000 $6,000
2013–2015 $5,500 $6,500

Employer-Sponsored Plans[edit]

Employer-sponsored plans include Roth, Traditional, and Solo 401(k), 403(b), and Thrift Savings Plan (TSP) accounts. These plans accept contributions from both the employer and the employee, each of which are subject to different limits:

IRS Elective Deferral Limit, IRC Section 401(g)

The maximum amount an employee may elect to contribute across all employer-sponsored plans.

IRS Annual Additions Limit, IRC Section 415(c)

The combined maximum amount an employer and employee can contribute together to a single employer-sponsored plan.

IRS Catch-Up Contributions Limit, IRC Section 414(v)

The maximum additional amount, on top of the above limits, an employee who will be age 50 or older by the end of the year may elect to contribute across all employer-sponsored plans if their plan explicitly allows catch-up contributions or they are eligible to contribute to the plans of two or more unrelated employers.

Year Elective Deferral Annual Additions Catch-Up Contribution
1987 $7,000 --- ---
1988 $7,313 --- ---
1989 $7,627 --- ---
1990 $7,979 --- ---
1991 $8,475 --- ---
1992 $8,728 --- ---
1993 $8,994 --- ---
1994 $9,240 --- ---
1995 $9,240 --- ---
1996 $9,500 --- ---
1997 $9,500 --- ---
1998 $10,000 --- ---
1999 $10,000 --- ---
2000 $10,500 --- ---
2001 $10,500 --- ---
2002 $11,000 $40,000 ---
2003 $12,000 $40,000 $2,000
2004 $13,000 $41,000 $3,000
2005 $14,000 $42,000 $4,000
2006 $15,000 $44,000 $5,000
2007 $15,500 $45,000 $5,000
2008 $15,500 $46,000 $5,000
2009 $16,500 $49,000 $5,500
2010 $16,500 $49,000 $5,500
2011 $16,500 $49,000 $5,500
2012 $17,000 $50,000 $5,500
2013 $17,500 $51,000 $5,500
2014 $17,500 $52,000 $5,500

Deferred Compensation Plans[edit]

457(b) Limits

Prior to the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA), 457(b) plan contributions were limited to ~$8,500 and were included in the elective deferral limit calculations for all employer-sponsored plans.

EGTRRA's Section 615 'de-coordinated' the 457(b), increasing the total 457(b) contribution limit (employer plus employee) to the 401(g) limit and limiting 457(b) contributions separately from 401(k), 403(b), and TSP contributions. For instance, in 2010 it was possible to contribute $16,500 to a 401(k) or 403(b) and an additional $16,500 to a 457(b).

Governmental 457(b) plans may offer the same over-50 catch-up contribution options discussed above; non-governmental 457(b) plans do not have that option.

For the three years prior to normal retirement age (65-70.5), participants in governmental or non-governmental 457(b) plans that offer a 'final three years catch-up' can defer up to double the amount or the sum of their previous undercontributions, whichever is lower. This extra catch-up can be used in addition to the over-50 catch-up.

Self-Employed Retirement Plans[edit]

If you are self-employed, you can open a special retirement plan into which you can contribute as both the employee AND the employer. The limits for these accounts are quite high, and you can participate in them simultaneously with the plan offered by another employer.

Employer Contributions: Profit Sharing

The employer's portion of SEP-IRA or Solo 401(k) contributions are called 'profit-sharing'.

Internal Revenue Code Section 401(a)(3) sets the profit-sharing limit at 25% of the entity's income subject to self-employment tax

Schedule C sole-proprietors must do an added calculation starting with earned income to determine their maximum contribution, which, in effect, brings the maximum 25% of compensation limit down to 20% of earned income.

A step-by-step worksheet for this calculation can be found in IRS Publication 560.

Solo 401(k) Elective Deferral Limits


SEP-IRA Elective Deferral Limits

References[edit]