Retirement Contributions

The IRS has issued new 401(k) and 403(b) contribution limits for 2019.  The new limit for 2019 is $19,000 (an increase of $500).  For those over 50, an additional $6,000 can be contributed, for a total of $25,000.  The combined annual limit for employee and employer contributions is $56,000.

The limit for traditional and Roth IRA contributions increases to $6,000 (an increase of $500 and the first increase since 2013).  For those that are over the age of 50, an additional $1,000 can be contributed (for a total of $7,000).

If you participate in a retirement plan at work, the IRA deduction is phased out as your income increases.  The phaseout for single taxpayers is $64,000 to $74,000 and for married taxpayers is $103,000 to $123,000.  Employees must combine contributions made to their 403(b) accounts with contributions made to all other plans in which they participate: 401(k)s other qualified plans, and SIMPLE IRAs. The employee’s total elective deferrals to all of these plans combined cannot exceed the annual deferral limit ($19,000 in 2019 and $18,500 in 2018).

According to the IRS, the income phase-out for taxpayers making contributions to a Roth IRA is $122,000 to $137,000 for singles and heads of household. For married couples filing jointly, the income phase-out range is $193,000 to $203,000.

For more information, visit irs.gov