“Contributing to a self-directed retirement plan gives investors the freedom of choice to invest in assets that they know and understand”
FORT MYERS, Fla. (PRWEB) January 26, 2017
The new contribution limits for retirement plans have been announced by the IRS. There are a few changes in how much money can be contributed for individuals who participate in employer-sponsored plans and SEP IRAs.
Contribution limits to retirement plans are important to know and understand. Maxing them out each year can help individuals reach retirement goals. Retirement plan owners should review the new limits set forth by the IRS each year and adjust savings budgets accordingly.
In 2016, the maximum employee contribution to a 401(k), 403(b), 457, and federal thrift savings plan was $18,000. As of 2017 the new contribution limit remains at $18,000. The total combined contribution limit, salary deferral plus profit-sharing match increased. In 2016, the total combined contribution limit for individuals ages 50 or under was $53,000; in 2017 that amount rises to $54,000. The total combined contribution limit for individuals ages 50 or older can now contribute $60,000 in 2017; previously $59,000 in 2016.
The contribution limits for SEP plans, which are available to self-employed individuals, partners, or owners of corporations, have also increased. The contribution limit for 2016 was $53,000 or 25% of compensation, and in 2017 it will increase by $1000 to a contribution limit of $54,000 or 25% of compensation.
There have been no changes on how much a person can contribute to a SIMPLE, traditional, or Roth IRAs. In 2016 and in 2017 the contribution limits remain the same. The maximum contribution limit is $5,500 for a traditional or Roth IRA, and the catch-up limit for individuals 50 or older is still $1,000.
These contribution limits apply to self-directed retirement accounts and non-self-directed accounts. Non-self-directed retirement accounts limit investors to only stocks, bonds and mutual funds. Self-directed IRAs allow investors to invest in alternative assets such as real estate, notes and mortgages, foreign currency, private placements, and checkbook-control LLCs. “Contributing to a self-directed retirement plan gives investors the freedom of choice to invest in assets that they know and understand,” says Dave Owens, President and CEO of Midland IRA.
Regardless of the retirement plan, it is important to follow the IRS rules by knowing how much is allowed to be contributed each year. “Failing to comply with contribution limits in your IRA and other savings plans can cause complications with the IRS that you want to avoid,” says Owens.
Individuals can still make a contribution to their retirement account for 2016 until April 15, 2017, as well as make a 2017 contribution until April 15, 2018. Midland IRA has updated the 2017 contribution limits on their website.
About Midland IRA
Midland IRA is a self-directed IRA administrator that provides tax-deferred and tax-free investment opportunities, superior customer service, and educational tools to assist investors in realizing the maximum benefits possible within IRAs. Midland IRA makes it easy to use self-directed retirement plans to invest in assets that the individual investor knows, understands, and can control. Midland IRA is also a 1031 exchange qualified intermediary. To learn more visit www(dot)MidlandIRA(dot)com.
About Dave Owens
Dave Owens is president of Midland IRA in Fort Myers, Chicago, and Miami. Owens opened the Fort Myers headquarters in 2003. His background as a certified public accountant, combined with a long history of personal retirement self-direction, provides his audiences and clients with solid advice and practical solutions to their IRA investment questions. Dave holds a BS in accounting from Purdue University. He also earned the prestigious Certified Exchange Specialist® designation through the Federation of Exchange Accommodators.