December 13, 2018
2019 Retirement Plan Limit Changes
By Paul Miloe, CRPS®
The IRS has increased the amounts available for contributions to several retirement plans. If you seek to maximize your contributions, be sure to review the updated limits below. For full details, search on IRS Notice 2018-83.
- $56,000 – Defined Contribution Plan Limit. Common plans are 401(k), 403(b), TSA, or SEP, but this applies to all plans under IRC Section 415(c)(1)(A). This is an all-inclusive total – salary deferrals + employer contributions (known as 415 dollar limit).
- $19,000 – Defined Contribution Plan Elective Deferral Limit. For those at least 50 years old in 2019, they can defer additional $6,000 ($25,000 total deferral). Catch up only applies to elective deferrals. On 401(k)s, 403(b)s, and TSAs, this can increase the overall contribution to $62,000.
- $280,000 – Maximum compensation recognized within 401(a) plans (like 401(k)).
- $13,000 – SIMPLE IRA Deferral Limit. 50 and over can defer an extra $3,000 ($16,000 total).
- $6,000 – IRA/Roth IRA Contribution Limit. 50 and over can do additional $1,000 ($7,000 total).
- Deductible IRA phase out limits for those covered by employer plans (based on Adjusted Gross Income – AGI) – $64K-$74K Singles/Head of Household or $103K-123K Married Filing Jointly (MFJ).
- Deductible IRA phase out limits for those not covered by employer plans, but who has a spouse that is covered – $193-203K (MFJ).
- Roth IRA contribution phase out limits – Singles $122K-$137K; MFJ $193K-203K.
While these are the permitted maximums, other limits can apply (especially on 401(k) plans). If you’d like a review of your retirement planning, we’re here to help!
For comprehensive review of your personal situation, always consult with a tax or legal advisor. Neither Cetera Advisor Networks LLC nor any of its representatives may give legal or tax advice.
Distributions from traditional IRAs and employer sponsored retirement plans are taxed as ordinary income and, if taken prior to reaching age 59 ½, may be subject to an additional 10% IRS tax penalty. A Roth IRA offers tax free withdrawals on taxable contributions. The tax-free and penalty-free withdrawal of earnings are subject to IRS limitations (IRS Publication 590-B). Taxation of retirement benefits may vary by state.