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George F. Bearup, J.D. Senior Legal Trust Advisor

5-Nov-18

2019 Retirement Plan Contribution Limits

Take-Away: The last increase in IRA contribution limits occurred in 2013. Larger retirement plan contribution limits will be permitted in 2019,  hopefully encouraging more individuals to save for retirement.

Source: Treasury Notice 2018-83

IRAs: The contribution limit to an IRA for 2019 will increase from $5,500 a year to $6,000. If the taxpayer is over age 50 years, then the ‘catch-up’ additional contribution will be $1,000, or an annual total contribution, if over age 50, of $7,000.

401(k), 403(b) and most 457 Accounts: The increase in contributions to a 401(k), 403(b), 457 and Thrift Savings Plans increases from $18,500 to $19,500 a year. The ‘catch-up’ additional contribution for those over age 50 remains $6,000.

Defined Contribution Plans: The annual contribution limitation for a defined contribution qualified plan(s) [IRC 415(c)(1)(A)] increases to $56,000 (up from $55,000.)

Defined Benefit Plans: The limitation on the annual benefit that is paid from a defined benefit pension plan [IRC 415(b)(1)(A)] increases to $225,000 (up from $220,000.)

Roth IRA Contributions: A taxpayer’s adjusted gross income (AGI) affects how much that taxpayer can contribute to a Roth IRA. Those AGI limitations as to when a contribution can be made to a Roth IRA and the amount are also increased:

  • Single Taxpayer: The AGI phase out of the Roth contribution amount ranges from $122,000 to $137,000 (up from $120,000 to $131,000.)
  • Married Taxpayers: The AGI phase out of the Roth contribution amount ranges from $193,000 to $203,000 (up from $189,000 to $199,000.)

Spousal Contributions to IRA: Income limitations also apply to deductible contributions to a traditional IRA when the taxpayer or the taxpayer’s spouse participate in a company sponsored qualified retirement plan.

  • Single Taxpayer: The IRA deduction will be phased out between $69,000 and $74,000 AGI (up from $63,000 and $73,000.)
  • Married Taxpayers: The IRA deduction will be phased out between $103,000 and $123,000 AGI (up from $101,000 and $121,000.)

SIMPLE IRAs: A contribution to a savings incentive match plan for employees, a SIMPLE IRA, is increased in its annual limit to a maximum of $13,000 (up from $12,500) with an additional ‘catch-up’ contribution if over age 50 of another $3,000.