Bigger Retirement Savings in 2019: IRS Boosts Contribution Limits
Good news for retirement savers! The Internal Revenue Service (IRS) has announced increases to the contribution limits for various retirement plans in 2019, reflecting adjustments for the cost of living.
Key Contribution Limit Increases for 2019
- 401(k) Plans: The annual contribution limit will rise to $19,000, up from $18,500.
- IRA Plans: The annual contribution limit will increase to $6,000, up from $5,500. This is the first increase since 2013.
- Other Plans: Limits for 403(b)s, most 457 plans, and the federal government’s Thrift Savings Plan will also increase to $19,000.
“This is another win for investors and savers,” says Stephanie Bacak, a financial planner at Capstone Global Advisors. “For so long there were really no cost of living increases in the IRA so it is a great opportunity for so many to be more prepared for retirement.”
Catch-Up Contributions Remain Unchanged
Catch-up contributions, designed for individuals aged 50 and over, will remain at their current levels:
- 401(k) Catch-Up: $6,000
- IRA Catch-Up: $1,000
Increased Income Ranges for IRA Eligibility
The IRS is also raising the income ranges that affect eligibility for:
- Deductible contributions to Traditional IRAs
- Contributions to Roth IRAs
- Claiming the Saver’s Credit
Here’s a look at the increased income phase-out ranges for Roth IRA contributions:
- Singles and Heads of Household: $122,000 to $137,000 (up from $120,000 to $135,000).
- Married Couples Filing Jointly: $193,000 to $203,000 (up from $189,000 to $199,000).
Maximizing your contributions.
While The new increases presents opportunities for retirement savers, Shane Mason, certified financial planner at Brooklyn FI, highlights that the benfit is for those making maximum contributions.
Those who are consistanly making the maximum contributions to thier 401(k) need to check that they are allocating the correct amount going forward.
Below is a breakdown is contributions based on how frequently you are paid.
- Those that are paid semi-monthly should be contributing $792 per paycheck.
- Those paid biweekly should be contributing $731 per paycheck.
Source: CNNMoney (New York)
First published November 1, 2018: 4:50 PM ET
General Content Disclaimer
The content on this website, including articles generated by artificial intelligence or syndicated from third-party sources, is provided for informational purposes only. We do not own the rights to all images and have not independently verified the accuracy of all information presented. Opinions expressed are those of the original authors and do not necessarily reflect our views. Reader discretion is advised, as some content may contain sensitive, controversial, or unverified information. We are not responsible for user-generated content, technical issues, or the accuracy of external links. Some content may be sponsored or contain affiliate links, which will be identified accordingly. By using this website, you agree to our privacy policy. For concerns, including copyright infringement (DMCA) notices, contact us at info@keewee.news
