[Updated on Nov. 1, 2018 after the IRS published the official numbers.]
Retirement plan contribution limits are adjusted for inflation each year. Inflation has come up a bit lately. It’s going to push up both the 401k/403b/457 contribution limit and the IRA contribution limit in 2019 by $500.
Before the IRS published the official numbers, I was able to make my own calculations using published inflation numbers and the same rules the IRS uses as stipulated by law. Before I had the complete inflation numbers, due to rounding rules I could project the contribution limit for next year with high confidence. The inflation numbers in the months-to-come just weren’t able to make the limits cross another rounding threshold.
I had been able to do early projections with 100% accuracy ever since I started doing them several years ago. 2019 is no exception. My projections matched 100% to the official numbers published by the IRS in its Notice 2018-83.
401k/403b/457 Elective Deferral Limit
401k/403b/457 contribution limit will go up by $500 from $18,500 in 2018 to $19,000 in 2019. If you are age 50 or over, the catch-up contribution limit will stay the same at $6,000 in both 2018 and 2019. Employer match or profit sharing contributions aren’t included in these limits. 401k and 403b share the same limit. The 457 plan limit is separate. You can contribute to both a 401k/403b plan and a 457 plan.
Annual Additions Limit
The total employer plus employee contributions to all defined contribution plans by the same employer will increase by $1,000 from $55,000 in 2018 to $56,000 in 2019. The age-50-or-over catch-up contribution is on top of this limit.
Highly Compensated Employee Threshold
If your employer limits your contribution because you are a Highly Compensated Employee (HCE), the minimum compensation will go up by $5,000 from $120,000 in 2018 to $125,000 in 2019.
SIMPLE 401k and SIMPLE IRA Contribution Limit
SIMPLE 401k and SIMPLE IRA plans have a lower limit than 401k plans. It will also go up by $500 from $12,500 in 2018 to $13,000 in 2019. If you are age 50 or over, the catch-up contribution limit will stay the same at $3,000 in both 2018 and 2019. Employer contributions aren’t included in these limits.
Traditional and Roth IRA Contribution Limit
Traditional and Roth IRA contribution limit will go up by $500 from $5,500 in 2018 to $6,000 in 2019. The age 50 catch up limit is fixed by law at $1,000 in all years. The IRA contribution limit and the 401k/403b or SIMPLE contribution limit are separate. You can contribute to both a 401k/403b/SIMPLE plan and a traditional or Roth IRA.
Deductible IRA Income Limit
The income limit for taking a full deduction for your contribution to a traditional IRA while participating in a workplace retirement will increase by $1,000 for singles, from $63,000 in 2018 to $64,000 in 2019, and it will increase by $2,000 for married filing jointly, from $101,000 in 2018 to $103,000 in 2019. The deduction completely phases out when your income goes above $73,000 in 2018 and $74,000 in 2019 for singles; and $121,000 in 2018 and $123,000 in 2019 for married filing jointly.
The income limit for taking a full deduction for your contribution to a traditional IRA when you are not covered in a workplace retirement but your spouse is will go up by $4,000 for married filing jointly from $189,000 in 2018 to $193,000 in 2019. The deduction completely phases out when your income goes above $199,000 in 2018 and $203,000 in 2019 for married filing jointly.
Roth IRA Income Limit
The income limit for contributing the maximum to a Roth IRA will go up by $2,000 for singles from $120,000 in 2018 to $122,000 in 2019. It will go up by $4,000 for married filing jointly from $189,000 in 2018 to $193,000 in 2019. You can’t contribute anything directly to a Roth IRA when your income goes above $135,000 in 2018 and $137,000 in 2019 for singles and $199,000 in 2018 and $203,000 in 2019 for married filing jointly, up by $2,000 and $4,000 respectively in 2019. You can still do a backdoor Roth IRA in such case.
Flexible Spending Account Contribution Limit
The FSA contribution limit will go up by $50 from $2,650 in 2018 to $2,700 in 2019.
Health Savings Account Contribution Limit
The HSA contribution limit will go up from $3,450 in 2018 to $3,500 in 2019 for single coverage. It will go up from $6,900 in 2018 to $7,000 in 2019 for family coverage. This was announced previously in the spring. Please see 2017 2018 2019 HSA Contribution Limits.
Saver’s Credit Income Limit
The income limits for receiving a Retirement Savings Contributions Credit (“Saver’s Credit”) will increase in 2019. For married filing jointly, it will be $38,000 in 2018 and $38,500 in 2019 (50% credit), $41,000 in 2018 and $41,500 in 2019 (20% credit), and $63,000 in 2018 and $64,000 in 2019 (10% credit). The limits for single will be at half of the limits for married filing jointly, at $19,000 in 2018 and $19,250 in 2019 (50% credit), $20,500 in 2018 and $20,750 in 2019 (20% credit), and $31,500 in 2018 and $32,000 in 2019 (10% credit).
|Limit on employee contributions to 401k, 403b, or 457 plan||$18,500||$19,000||$500|
|Limit on age 50+ catchup contributions to 401k, 403b, or 457 plan||$6,000||$6,000||None|
|SIMPLE 401k or SIMPLE IRA contributions limit||$12,500||$13,000||$500|
|SIMPLE 401k or SIMPLE IRA age 50+ catchup contributions limit||$3,000||$3,000||None|
|Highly Compensated Employee definition||$120,000||$125,000||$5,000|
|Maximum annual additions to all defined contribution plans by the same employer||$55,000||$56,000||$1,000|
|Traditional and Roth IRA contribution limit||$5,500||$6,000||$500|
|Traditional and Roth IRA age 50+ catchup contribution limit||$1,000||$1,000||None|
|Deductible IRA income limit, active participant in workplace retirement plan, single||$63,000 – $73,000||$64,000 – $74,000||$1,000|
|Deductible IRA income limit, active participant in workplace retirement plan, married filing jointly||$101,000 – $121,000||$103,000 – $123,000||$2,000|
|Deductible IRA income limit, spouse is active participant in workplace retirement plan||$189,000 – $199,000||$193,000 – $203,000||$4,000|
|Roth IRA income limit, single||$120,000 – $135,000||$122,000 – $137,000||$2,000|
|Roth IRA income limit, married filing jointly||$189,000 – $199,000||$193,000 – $203,000||$4,000|
|FSA Contribution Limit||$2,650||$2,700||$50|
|HSA Contribution Limit, single coverage||$3,450||$3,500||$50||HSA Contribution Limit, family coverage||$6,900||$7,000||$100|
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