In 2019, individuals will be able to contribute more to their retirement savings. Rudler has compiled a list of changes for you to reference when reviewing your 401k and IRA contributions for 2019:
- The Employee Elective Deferral Limit has been increased from $18,500 to $19,000 for 401(k), 403(b), most 457 plans and the federal government’s Thrift Savings Plan.
- Defined-contribution plans such as a 401(k) has increased the overall limit from $55,000 in 2018 to $56,000 in 2019.
- The Annual Compensation Limit, or maximum compensation that can be considered for retirement plan purposes, has been raised from $275,000 to $280,000.
- The Defined Benefit Limit has increased from $220,000 to $225,000.
- Highly Compensated Employees limit has been increased from $120,000 to $125,000.
- Key Employees have an increased limit of $180,000, up from $175,000.
- The Social Security Taxable Wage Base, or the maximum amount of earned income upon which employees must pay Social Security taxes has been increased to $132,900, up from $128,400.
What hasn’t changed? The Catch-Up 401(k) Contribution for those over 50 years old remains at $6,000 and the 404 Deduction limit remains at 25 percent.
Deductions for various contributions are subject to income phase out ranges depending on earnings and access to a workplace retirement plan.
- In 2019, anything below $64,000 is fully deductible and anything above $74,000 is not for single taxpayers covered by a workplace retirement range.
- For married couples filing jointly, the range is $103,000 to $123,000. For married couples where one person is not covered by a workplace retirement plan but is the other is, the deduction is phased out between incomes of $193,000 to $203,000.
- For a married individual filing separately and covered by a workplace retirement plan, the phase out is between $0 and $10,000.
Roth IRAs have separate income limits and no deductions. Single taxpayers or heads of household with Roth IRAs have an income phase out range between $122,000 and $137,000. Married couples filing jointly have a range of $193,000 to $203,000 and the range for a married individual filing separately remains at $0 to $10,000.
Are you curious about how these changes may impact you or your plan? Contact one of our Employee Benefit Team Members today to learn more by calling (859) 331-1717.
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