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Retirement plan contributions: Do I still have time to save?

Personal Finance Retirement Taxes

Did your plan to put money into a retirement account for 2016 fall flat?

Back view of an elderly man sitting at coffee house.

Don’t worry – you still have time!

While automatic contributions deducted straight from your paycheck throughout the year is the easiest way to build your retirement account, there are other ways to save.

With the New Year right around the corner, it’s now the perfect time to make a few last minute contributions to your retirement savings.

Here are the deadlines for setting up and making contributions to different types of retirement plans:

401(k) plans and 403(b) plans

Many employers offer a 401(k) or 403(b) plan to their employees.

Once an employee enrolls in the plan, they simply elect to have contributions deducted from their pay and automatically deposited into the account.

Employees can make contributions to a 401(k) or 403(b) until December 31 of the current tax year.

In some cases, the employer will match a percentage of an employee’s contribution as part of their benefits package.

Solo 401(k) plans

If you’re self-employed, you have until December 31 to set up and fund a one-participant 401(k) plan, also known as a solo 401(k) plan.

You can make your “employer” contributions to your solo 401(k) plan until your business income tax return due date, including extensions.

Traditional and Roth IRAs

There’s no rush to get your Individual Retirement Arrangement (IRA) contributions in before December 31. That’s because the contribution deadline for both traditional and Roth accounts is the due date of your tax return.

For tax year 2016, that deadline is April 18, 2017 and does not extend to filing extension due dates like solo 401(k) plans.

An IRA is the only plan that requires you to make all contributions by the original return due date.

For some people, the extra time to contribute after year-end is a huge benefit to their tax situation. Many are motivated to make traditional IRA contributions as they prepare their income tax return and discover how much a deductible IRA contribution can save on their taxes.


SEP IRAs are another great choice for self-employed individuals and small businesses.

SEP stands for Simplified Employee Pension, and any business owner with one or more employees or anyone with freelance income, can open a SEP IRA.

However, only the employer can contribute to the account. Individual contributions can’t be made.

The deadline to set up a SEP IRA and make contributions is the business tax return due date, including extensions. This applies to both self-employed SEPs and employee SEPs.


If you own a business and want to start a Savings Incentive Match Plan for your employees, otherwise known as a SIMPLE IRA, be sure to do it by October 1 of the year to which a contribution applies.

Unfortunately, that means it’s too late to still make a contribution for 2016. However, keep the October 1 deadline in mind for 2017.

If your employees make salary reduction contributions to their SIMPLE IRAs, you must deposit those contributions within 30 days after the end of the month in which you would have paid the employees.

If you’re self-employed and have no common-law employees, you can deposit salary reduction contributions up until January 30 of the following year.

Contributions to a SIMPLE IRA can be made until your business income tax return due date, including extensions.


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