The IRS has released 2019 cost-of-living adjustments, resulting in increases to annual deferral limits for retirement accounts. Below is a list of the changes:
The annual contribution will increase from $5,500 to $6,000 in 2019. The additional catch up contribution for those over 50 remain at $1,000 for a total of $7,000. Anyone with earned income can contribute to a traditional IRA however their contributions may not be deductible. If you are making a non-deductible contribution you may want to consider a back-door Roth IRA. Below are the limits to determine if they are fully deductible, partially deductible, or non-deductible if you are covered by a retirement plan at work. Please remember to consult your tax preparer.
|Deduction||Single||Married filing jointly|
|Full||$64,000 or less||$103,000 or less|
|Partial; deduction begins to phase out||More than $64,000 and less than $74,000||More than $103,000 and less than $123,000|
|Non-deductible||Above $74,000||Above $123,000|
If you are not covered by a plan at work here are the income limits:
|Deduction||Single and married filing jointly (neither spouse covered)||Married filing jointly – one spouse covered|
|Full||Any||$193,000 or less|
|Partial; deduction begins to phase out||More than $193,000 and less than $203,000|
Roth IRAs will also see an increase of $500 to $6,000 with a $1,000 catch up contribution for a total of $7,000 in 2019. The income phase-out range is also increasing to $122,000-$137,000 for single filers and $193,000-$203,000 for joint.
Defined Contribution Plans
The contribution limits for 401(k)s, 403(b)s, and most 457 plans have increased from $18,500 to $19,000 in 2019. Employees over 50 will be eligible for a catch-up contribution of $6,000 in 2019 for a total of $25,000.
The contribution for simplified employee pension plans will increase from $55,000 to $56,000 in 2019.
Simple IRA’s and Simple 401(k)s
If you are not participating in another retirement plan, the max contributions to these plans in 2019 will increase by $500 to $13,000.
If you have any questions about these changes or would like to discuss increasing your 2019 retirement contributions, please feel free to contact one of our advisors.