Essential Financial Planning Numbers for 2017

Nov 28, 2016 • Written by Paul Staib | Certified Financial Planner (CFP®), MBA, RICP®

 Blog Home   »     »   Essential Financial Planning Numbers for 2017


Here’s a summary of several of the key financial-planning numbers to have on your radar as we head into 2017.

Company Retirement Plans: 401(k), 403(b), and 457

The contribution limits for 401(k)s, 403(b)s, and 457 plans are staying the same for 2017 as they were in 2016. Contribution limits to 401(k)s, 403(b)s, and 457s remain at $18,000 for investors younger than 50 and $24,000 for those 50 or older. The total allowable contribution to a 401(k) – including employee contributions (pre-tax, Roth, and after-tax) as well as employer’s contributions – is increasing a bit for 2017, to $54,000 from $53,000 last year.


The contribution limit to IRAs is also remaining the same for 2017: Investors younger than 50 can contribute $5,500 to an IRA in 2017, and those older than 50 can make an additional catch-up contribution of $1,000. That limit is the same for both Roth and traditional contributions.

The income limits to be able to deduct a traditional IRA contribution are slightly increasing 2017. Individual filers who can make a retirement-plan contribution at work can make a fully deductible IRA contribution if their 2017 income is under $62,000; they cannot deduct their IRA contribution if their income is more than $72,000. The amount of the contribution that is deductible is reduced – or phased out – for single taxpayers whose income is between $62,000 and $72,000. For married couples filing jointly in which the spouse who makes the IRA contribution is covered by a workplace retirement plan, traditional IRA contributions are fully deductible if their income falls below $99,000; contributions aren’t deductible if their income exceeds $119,000. Contributions are partially deductible if income falls between those two thresholds.

Roth contributions aren’t deductible, but income limits are increasing. Singles earning less than $118,000 can make a full Roth contribution, but Roth IRA contributions are out of reach for single filers who earn more than $133,000. Contributions are reduced if the single taxpayer’s income falls between these two levels. Married couples filing jointly can make a full Roth IRA contribution if their income is less than $186,000; they are ineligible to make a Roth contribution if their income exceeds $196,000. Again, contributions are reduced for married couples filing jointly who earn between $186,000 and $196,000.

Long-Term Capital Gains on Taxable Investments Accounts

For investors selling investments within their taxable accounts (that is, outside of their tax-deferred and retirement accounts), the long-term capital gains bands of 0% (for investors in the 10% and 15% income-tax brackets), 15% (for investors in the 25%, 28%, 33%, and 35% income tax-brackets), and 20% (for investors in the 39.6% income-tax bracket) carry over for 2017, though the income that falls into each of these brackets is edging up a bit as the tax brackets are adjusted upward.

Social Security

Social Security recipients will be receiving a small cost-of-living adjustment in 2017, amounting to 0.3%. Many folks are continuing to work even after they’ve started receiving Social Security benefits. In 2017, the amount that a Social Security recipient who’s under full retirement age can earn without prompting a temporary withholding of benefits is $16,920; someone who reaches 66 (full retirement age) in 2017 will be able earn up to $44,880 without triggering the temporary withholding in Social Security benefits. Those who are of full retirement age in 2017 can earn an unlimited amount without any benefits withholding. Any withheld benefits are added back to benefits after an individual reaches full retirement age.

The amount of workers’ income that is subject to Social Security tax is also increasing for 2017, to $127,200.

Health Savings Accounts

The parameters for high-deductible healthcare plans and health savings accounts are generally remaining the same for 2017. For 2017, a high-deductible plan is defined as one with at least a $1,300 deductible for individuals and a $2,600 deductible for families; the maximum out-of-pocket expenses that covered people can incur are $6,550 for individuals and $13,100 for families. For 2017, those with single coverage can contribute $3,400 to an HSA (a slight increase for 2017), while those with family coverage can contribute $6,750. Investors age 55 and older can make an additional $1,000 catch-up contribution to their HSAs.

For those who are making the maximum allowable contributions to their company retirement plans and IRAs, the HSA provides another way to amass tax-advantaged savings. The investor makes pre-tax contributions, the money accumulates tax-free, and qualified withdrawals are also tax-free.

Education Savings

Each individual can contribute up to $14,000 a year to a 529 college savings plan on behalf of a specific individual without having that contribution count toward the gift tax. Additionally, investors who would like to make a large upfront contribution to a 529 can contribute up to $70,000 on behalf of a single individual in a given year; as long as he or she makes no future contributions on behalf of the same individual for the next five years, the contribution will not count toward the gift tax.

Coverdell Education Savings Account contribution limits are much lower; for 2017, they are capped at $2,000 per beneficiary, and income limits apply. For 2017, single filers earning more than $110,000 cannot contribute to a Coverdell, and contributions are reduced for individuals earning between $95,000 and $110,000. Married couples filing jointly can contribute to a Coverdell if they earn less than $220,000 in 2017; contributions are reduced if the couple’s income falls between $190,000 and $220,000.

Estate and Gift Tax

The annual gift-tax exclusion for 2017 is staying the same as 2016, at $14,000. The amount of assets that are exempt from the estate and gift tax is getting a bump-up for 2017, to $5,490,000. With the spousal portability election, that means that married couples can escape gift/estate taxes if their total assets and lifetime gifts are less than $10,980,000.

Paul Staib | Certified Financial Planner (CFP®), MBA, RICP®

Paul Staib, Certified Financial Planner (CFP®), RICP®, is an independent Flat Fee-Only financial planner. Staib Financial Planning, LLC provides comprehensive financial planning, retirement planning, and investment management services to help clients in all financial situations achieve their personal financial goals. Staib Financial Planning, LLC serves clients as a fiduciary and never earns a commission of any kind. Our offices are located in the south Denver metro area, enabling us to conveniently serve clients in Highlands Ranch, Littleton, Lone Tree, Aurora, Parker, Denver Tech Center, Centennial, Castle Pines and surrounding communities. We also offer our services virtually.

Read Next

Retirement Income Principles

As more than 76 million baby boomers – nearly 25 percent of all Americans — approach retirement age in the…

Read More

What’s the Difference Between Marginal and Effective Tax Rates?

In order to explain the difference between “marginal” and “effective” tax rates, it’s important to first dispel a common misconception:…

Read More