Know the 2017 IRS contribution limits

The Internal Revenue Service (IRS) sets limits on the amount you can contribute to workplace plans—401(k), 403(b), and 457 plans—each year. 

Article highlights

  • Aim for the 10%
  • Save more after 50
  • Catching up on savings

Contribution limits for 2017

For 2017, the contribution limit is $18,000, the same as it was in 2016. The catch-up contribution limit (if you're over 50 years old) also has stayed the same, so you can add an additional $6,000, for a total of $24,000. 

Consider saving 10%

One rule of thumb is to contribute at least 10% of your income to your plan each year. Some experts suggest saving even more.


You can start by saving 6% of your pay and increase it by 2% to 3% each year until you reach 10% or more. If possible, always contribute enough to get the full company match.

When you make pretax contributions to your plan, you lower your taxable income and reduce your tax bill. But your take-home pay isn’t reduced by as much as you're saving. For example, say you’re in the 25% tax bracket and make a $200 contribution to your plan each paycheck. You’d only reduce your take-home pay by $150.

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Save more if you’re 50 or over

You'll want to live well in retirement. Catch-up contributions let you contribute more money to your workplace retirement plan after age 50. You're eligible on January 1 of the year you turn 50, no matter how late in the year your birthday falls. See how this extra contribution can make a big difference: 

  • Scott is 50 and earns $72,000 per year. He had already reached the annual contribution limit for his workplace plan.
  • Now that he’s 50, he can defer $230 more from each paycheck.
  • At a modest 6% rate of return, Scott will add $148,035 to his savings by the time he’s 65—a significant boost.1

Learn more about catch-up contributions.


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Can you contribute more?

See how much a slight increase in savings could affect your paycheck and retirement savings. Contribution planner .

1This is a hypothetical example. It is not indicative of any product or performance and does not reflect any expense associated with investing. Taxes will be due upon distribution of the tax-deferred amount, including a 10% penalty tax on early withdrawals if distribution is made prior to age 59 1/2. If taxes were shown, results would be lower. Actual investment results will fluctuate with market conditions so that the amount withdrawn may be worth more or less than the original amount. 

This material is provided by The Lincoln National Life Insurance Company, Fort Wayne, IN, and, in New York, Lincoln Life & Annuity Company of New York, Syracuse, NY and their applicable affiliates (collectively referred to as “Lincoln”). This material is intended for general use with the public. Lincoln does not provide investment advice, and this material is not intended to provide investment advice. Lincoln has financial interests that are served by the sale of Lincoln programs, products and services.