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Guess 2016 403(B) Contribution Limits?

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Typically during the third week of October the IRS announces any changes to retirement plan contribution limits. Last year, the IRS raised 403(b) contribution limits from $17,500 to $18,000. Any guesses on what might happen this year?

 

Dan

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I am going to say $18,500 as well. I would be a fool to guess differently than Steve. However, my first gut feeling was that it will not change in 2016.

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I've done some calculations on this. The contribution limit is indexed to the CPI for the months of July, August and September. For July and August, the index was 238.654 and 238.316. respectively. In order for the limit to increase, the index for September will have to rise to 251.440, a level never reached.

 

My guess: No change.

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Michael!

Where have you been all of these years? I knew you retired several years ago, but you don't have to drop out of the human race, especially our conflicted 403b world, which will be conflicted for awhile longer.

 

Regarding your calculation. Its been reported that no increase in social security is forthcoming for 2016. Isn't SS indexed to the CPI also? Going along with your calculation, why isn't SS increased too?

 

Welcome back.

Steve

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Hi, Steve.

 

On the contrary, I haven't retired. Still working 40+ per week, just not as active in the 403(b) area as I once was. I still check the board periodically and, if there's a question I feel qualified to answer, I do so.

 

I think you misunderstood my response. There should be no change to the elective deferral limit unless the September CPI for September reached an unprecedented level. Similarly, there will be no increase to social security benefits.

 

However, I understand that Medicare Part B premiums for upper income taxpayers will increase, even thought the base premium will not. Another fine example of our tax dollars working hard for us.

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