IRS Increases Retirement Contribution Limits

There is terrific news for all of you investors out there. The Internal Revenue Service just announced that it has increased the retirement contribution limits for 2015. They’re doing this in an effort to keep pace with cost-of-living increases. So next year is your chance to stash away even more cash in your retirement accounts.

The annual contribution limit for 401(k), 403(b), most 457 plans, and the government’s Thrift Savings Plan will increase by $500 to $18,000. If you are age 50 or older, you can make catch-up contributions up to $6,000.

Other changes:

• Limits on annual contributions to an Individual Retirement Arrangement (IRA) will remain the same at $5,500. The catch-up contribution limit for those 50 and over is not subject to an annual cost-of-living adjustment. Therefore, contributions will stay at $1,000.

• The phase-out range for adjusted gross income for those making contributions to a Roth IRA is $183,000 to $193,000 for married couples filing jointly. This is an increase from $181,000 to $191,000 in 2014.

• If you are single or the head of your household, the income phase-out range is $116,000 to $131,000. This is an increase from $114,000 to $129,000.

• If you’re married but filing a separate return, the phase-out range will remain $0 to $10,000.The range is not subject to an annual cost-of-living adjustment.

For more on this topic, visit the IRS website.