By Richard Anderson
It’s a new year and I can’t think of a better time to highlight cost of living adjustments affecting dollar limitations for retirement-related items and social security benefits for 2019.
The contribution limit for employees who participate in 401(k), 403(b), most 457 plans, and the Federal government’s Thrift Savings Plan increased from $18,500 to $19,000. The catch-up contribution limit for employees aged 50 and over who participate in 401(k), 403(b), most 457 plans, and the Federal government’s Thrift Savings Plan remains unchanged at $6,000.
The limit on annual contributions to an individual retirement account, or IRA, increased from $5,500 to $6,000. The catch-up contribution limit for individuals aged 50 and over remains unchanged at $1,000.
Below is a summary of some key retirement plan figures for tax year 2019:
The income phase-out range for individuals making contributions to a Roth IRA is $122,000 to $137,000 for singles and heads of household, an increase from $120,000 to $135,000 last year. For married couples filing jointly, the income phase-out range is $193,000 to $203,000, up from $189,000 to $199,000.
While these retirement plan contribution limit increases may seem minor, they are important to keep in mind for financial planning purposes. If you contributed the maximum to your employer’s retirement plan last year, and plan on doing the same this year, you should check to make sure your salary deferrals have been updated to reflect the increased contribution limit.
If you have any questions about cost of living adjustments affecting dollar limitations for retirement plans, please do not hesitate to reach out to the HIGHLAND team.