On October 21, 2015, the Internal Revenue Service in IR-2015-118 announced the cost-of-living adjustments that apply to dollar limits for retirement plans for the tax year beginning on January 1, 2016.
As widely anticipated, since there was no increase in the cost of living, as measured by the Bureau of Labor Statistic’s Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) for the period covering the third quarter of 2014 to the third quarter of 2015, the retirement limits will remain at the 2015 levels.
In similar fashion, on October 15, the Social Security Administration announced that since there was no increase in the CPI-W no adjustment to monthly Social Security, Supplemental Income benefits, and Taxable Wage base would be made for 2016.
NOTE: IRA deduction phase-out limits for MFJ filers when one spouse is covered by a plan was increased by $1,000. A $1,000 increase in Roth IRA contribution phase-out was extended to Single and MFJ filers. We have highlighted the year-over-year changes for easy identification.