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Retirement Contribution Limits Increase in 2019

The IRS has announced retirement contribution limits for 2019.  It will be the first time in six years that Individual Retirement Accounts have seen an increase! Contribution limits will increase not only for IRAs, but for 401(k) and other defined contribution plans as well.

The IRA annual contribution cap will increase from $5,500 to $6,000.  The amount that can be contributed to a 401(k), or similar workplace retirement plan, will also increase by $500, moving up to $19,000 in 2019. Catch-up contribution limits for those 50 or older will remain unchanged at $6,000 for workplace plans, and $1,000 for IRAs.

Increases will also be applied to the deduction phase-out range for those contributing to an IRA and are also covered by a workplace retirement plan:

  • for single filers the phase-out range will be $64,000 to $74,000, up $1,000 from 2018.
  • for joint filers, where the spouse contributing to an IRA is also covered by a workplace plan, the phase-out range is $103,000 to $123,000
  • for an IRA contributor whose spouse is covered by a plan, the income phase-out is $193,000 to $203,000

Single contributors to Roth IRAs will see the income phase-out range increase to $122,000 to $137,000, up $2,000 from 2018. For married couples filing jointly the range will increase to $193,000 to $203,000, up $4,000 from 2018.

Lower and moderate-income families may be able to claim the Saver’s Credit on their tax returns for contributions to retirement savings plans. The threshold increases $1,000 for married couples, to $64,000; $48,000 for head of households, up $750; and $32,000 for singles and single filers, up $500 from 2018.

The deferred compensation limit in defined contribution plans for pre-tax and after-tax dollars will increase $1,000, to $56,000. The maximum defined benefit annual pension will increase $5,000, to $225,000.





Posted in: 401(k), IRA

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