2015 Limits on 401(k) & IRA Contributions

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Saving More For Retirement!

One of the most common questions people ask me is “How much can I put into my 401(k), IRA, or Roth IRA this year?”  401(k), IRA and Roth IRA limits for 2015 are set by the IRS, and were just announced recently.  And it’s good news for those who want to save as much as they can for retirement!

401(k) Limits for 2015

The limit for 401(k) contributions is going up by $500 to $18,000 in 2015, not including company matches.  The “catch-up” amount for workers over 50 is also increasing by $500 to $6,000 in 2015.  This is a total of $24,000 that you can defer into your 401(k) if you are over the age of 50.  Company matching and profit sharing contributions will be on top of this.

Of course, with the cost of living, not too many workers can defer that much of their pay towards retirement.  Vanguard recently put out a report called “How America Saves” that found that about 36% of all workers who earned over $100,000 last year put the maximum amount allowed into their 401(k).  For those who earned between $50,000 and $74,999 only 2% maxed out their 401(k) contributions.


The IRS said that the cost of living had not increased enough to warrant also increasing the limits on traditional IRA’s and Roth IRA’s.  2015 IRA & Roth IRA limits will remain at $5,500 for the year.  The “catch-up” amount for those over 50 will also remain unchanged at $1,000 for 2015.


The amount an employee can contribute to a SIMPLE IRA in 2014 is $12,000 and will be $12,500 in 2015.  The catch-up contribution for an employee over the age of 50 in a SIMPLE IRA is $2,500 in 2014 and will be $3,000 in 2015.

Income Limits For IRA’s & Roth IRA’s

However, there is some good news for those wanting to contribute to a Roth IRA in 2015.  Income limits were increased a little bit for this.  Single tax payers who earn less than $131,000, up from $129,000 can add some money to a Roth IRA.  If a single tax payer makes less than $116,000 (up from $114,000) they can put the full $5,500 into a Roth.  At the same time, married tax payers filing jointly who earn less than $193,000, up from $191,000 can add to a Roth IRA.  If they make less than $183,000 (up from $181,000) then they can make a full $5,500 contribution per person.

It will also be slightly easier for taxpayers to qualify for the so-called savers credit of up to $2,000, which is aimed to help low- and middle-income retirement savers. In 2015, the credit will be granted to married couples with income of less than $61,000 and single filers with incomes less than $30,500.


2 Responses

  1. Interesting information targeting those who are still working. But what about those of us who are already retired and have an IRA that was converted from a company 401k? If we have the ability to invest anything, being on a fixed income and all, is a Roth IRA the best bet?
    • Bill, I'm sorry that I missed your comment and am responding so late!! In your situation, you could consider converting part of your IRA to a Roth, and then it would grow tax free from now on. But when you do the conversion, you have to pay income taxes on whatever you convert in that same year. To make it worse, you have to pay the taxes out of your own pocket, you can't have the taxes come out of the IRA (unless you just want to withdraw the money and get taxed on it). So a Roth might still make sense if you have 15-20 years or more for it to keep growing tax free.

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