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Cost of Living Adjustments for 2019
The IRS has released the Cost of Living Adjustments for 2019. Many of the dollar limitations relating to qualified retirement plans have been increased, along with other retirement-related items.
Important Changes for 2019:
- The contribution limit for a participant in a 401(k), 403(b) and most 457 plans has increased to $19,000.00. The catch up contribution for employees age 50 and over who participate in these plans has remained unchanged at $6,000.00.
- The contribution limit for individual retirement accounts has been increased to $6,000.00, with the catch up contribution for individuals 50 and over remaining at $1,000.00.
- The limitation for defined contribution plans under Section 415(c)(1)(A) is increased to $56,000 from $55,000 in 2018.
- In addition to contribution limits, the income ranges will increase in 2019 for determining eligibility to make deductible contributions to traditional Individual Retirement Accounts, Roth IRAs and to claim the saver’s credit.
The following chart reflects some of the updated amounts for tax year 2019.
|
ANNUAL PLAN LIMITS |
2019 |
2018 |
|
Compensation |
280,000 |
275,000 |
|
Highly Compensated Definition |
125,000 |
120,000 |
|
Key Employee Definition |
180,000 |
175,000 |
|
LIMITS ON BENEFITS & CONTRIBUTIONS |
|
|
|
Defined Contribution Plans |
56,000 |
55,000 |
|
Defined Benefit Plans |
225,000 |
220,000 |
|
401(k) – 403(b) - & 457 Plan Elective Deferrals |
19,000 |
18,500 |
|
Simple Plan Elective Deferrals |
13,000 |
12,500 |
|
IRA |
6,000 |
5,500 |
|
CATCH UP CONTRIBUTIONS |
|
|
|
401(k) – 403(b) - & 457 Plans |
6,000 |
6,000 |
|
Simple Plans |
3,000 |
3,000 |
|
IRA |
1,000 |
1,000 |
|
SOCIAL SECURITY TAXABLE WAGE BASE |
132,900 |
128,400 |
|
TRADITIONAL IRA DEDUCTION PHASEOUT |
|
|
|
Single, Head of Household – Active Participant |
64,000/74,000 |
63,000/73,000 |
|
Married Filing Separate – Any spouse participates |
0/10,000 |
0/10,000 |
|
Married Filing Joint – Nonparticipating spouse |
193,000/203,000 |
189,000/199,000 |
|
Married Filing Joint – Participating Spouse |
103,000/123,000 |
101,000/121,000 |
|
ROTH IRA CONTRIBUTION ELIGIBILITY |
|
|
|
Married Filing Joint |
193,000/203,000 |
189,000/199,000 |
|
Single, Head of Household |
122,000/137,000 |
120,000/135,000 |
|
Married Filing Separate – Any spouse participates |
0/10,000 |
0/10,000 |
A more detailed account of these changes can be found in Notice 2018-83. If you have any questions regarding the Cost of Living Adjustments or your 401(k), we encourage you to contact your Dermody, Burke & Brown advisor.