2015 401k 403b IRA Contribution Limits

Understanding your retirement

The government released the Consumer Price Index for August 2014. Inflation is higher this year but still low by historical standard. Although we don’t have all the necessary numbers yet, because the way rounding works, I’m able to comfortably project the 2015 contribution limits for 401k/403b/457 plans. I’m also able to calculate the contribution limit for traditional and Roth IRAs, which only depends on the inflation numbers through August.

401k/403b/457 Elective Deferral Limit

401k/403b/457 contribution limit will increase by $500 to $18,000 in 2015. If you are age 50 or over, the catch-up contribution limit will also increase by $500 to $6,000.

If you are self-employed, the total employer plus employee contributions to all defined contribution plans by the same employer will go up by $1,000 from $52,000 to $53,000 in 2015.

SIMPLE 401k and SIMPLE IRA Contribution Limit

SIMPLE 401k and SIMPLE IRA plans have a lower limit than 401k plans. It will also go up by $500 to $12,500 in 2015. If you are age 50 or over, the catch-up contribution limit will also increase by $500 to $3,000.

Traditional and Roth IRA Contribution Limit

Traditional and Roth IRA contribution limit will stay the same at $5,500 in 2015. The age 50 catch up limit is fixed by law at $1,000.

All Together

  2014 2015 Increase
Limit on employee contributions to 401k, 403b, or 457 plan $17,500 $18,000 $500
Limit on age 50+ catchup contributions to 401k, 403b, or 457 plan $5,500 $6,000 $500
Traditional and Roth IRA contribution limit $5,500 $5,500 None
Traditional and Roth IRA age 50+ catchup contribution limit $1,000 $1,000 None
SIMPLE 401k or SIMPLE IRA contributions limit $12,000 $12,500 $500
SIMPLE 401k or SIMPLE IRA age 50+ catchup contributions limit $2,500 $3,000 $500
Maximum annual additions to all defined contribution plans by the same employer $52,000 $53,000 $1,000
Highly Compensated Employee definition $115,000 $120,000 $5,000

[Photo credit: Flickr user SalFalko]

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Comments

  1. KD says

    Thanks for the heads up! Prospect lower take home on account of maximizing contributions to increased 401k limit seems closer.

  2. John says

    Don’t forget the Normal Retirement Age/ Pre-Retirement Catch Up provision for the 457b accounts. This will allow up to a $36,000 contribution.

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