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2017 IRS Contribution Limits for 401k, 403(b) and IRA Retirement Accounts

Posted on Jan 2 2017 1:23PM by Attorney, Jason A. Lee

The IRS recently announced the new cost of living adjustments to the annual limits on retirement contributions for 2017.  These limits reflect the amount of money you are able to contribute to certain tax benefited retirement plans.  This can and should affect how you formulate your estate and retirement planning in Tennessee.

 

The new 2016 annual limits for contributions to a 401(k), 403(b), most 457 plans and the federal government Thrift Savings Plan remains the same as the prior year at $18,000.00.  This number has not changed over the past few years.  The annual catchup contribution allowance for these plans, available to those over 50, stands at $6,000.00 for 2017.   As a result, someone over the age of 50 can contribute $24,000.00 annually to their 401k.

 

The limit for contributions to an IRA (Roth or normal IRA) is also unchanged for 2017.  It remains at $5,500.00.  For those who take advantage of the Roth IRA, the AGI (Adjusted Gross Income) phase-out level for the ability to contribute was adjusted up for 2017.  The phase-out now begins at $186,000.00 for married couples filing jointly and $118,000.00 for singles and heads of household.  Once you hit these levels, the ability to contribute begins to phase out – and it is eventually completely eliminated.

 

I highly recommend that you work to update your beneficiary designations on your retirement and other accounts.  In Tennessee, if you have a proper beneficiary designation, these assets can pass outside of probate.  If you do not have any designation or if you name your estate as the beneficiary, then this money will pass through your estate in the probate process.  Many times the beneficiary designations do not math the Will and that is usually unintended.  Life circumstances change and this is an important thing to remember so your beneficiary designations match your intentions that are expressed in your Will.

 

Follow me on Twitter at @jasonalee for updates from the Tennessee Wills and Estates blog.

TAGS: Retirement plans - 401k etc., Tennessee Probate Law
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Jason A. Lee is a Member of Burrow Lee, PLLC. Contact Jason at 615-540-1004 or jlee@burrowlee.com for an initial consultation on wills estate planning and probate issues.

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Tennessee Wills and Estates Blog
Jason A. Lee, Member of Burrow Lee, PLLC
611 Commerce Street, Suite 2603
Nashville, TN 37203
Phone: 615-540-1004
E-mail: jlee@burrowlee.com

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