A major step in the retirement planning guide is to understand all the savings tools available. The IRA is the most versatile tool in your retirement toolbox. To take advantage of it, you should stay on top of yearly changes to the IRA contribution limits.
Each year the IRS announces the inflation adjusted numbers for the traditional and Roth IRA contribution limits along with the traditional IRA deduction limits. These cost of living adjustments are made when the inflation index meets a certain criteria. In turn, the adjustments prevent inflation from eating away at the IRA limits and your ability to save for retirement.
2016 IRA Contribution Limits
The 2016 IRA contribution limits will look just like it did for 2015. Both the traditional and Roth IRA will have the same contribution limit, which will max out at $5,500. If you are 50 years or older, there is a $1,000 catch up contribution. Continue Reading…