2019 Retirement Plan Limits

Each Fall the IRS releases updates to common retirement plan limits for the upcoming year. In the Fall of 2018, the IRS released Notice 2018-83 which established the dollar-limitations for retirement plans for the 2019 year.  Section 415 of the Internal Revenue Code (IRC) establishes the dollar-limitations and a subsection within permits the annual adjustments to these limitations based on inflation.

Below is a brief summary of the updates for 2019 for a variety of plans.

  • The annual benefit limitation for a defined benefit plan will be $225,000.

  • The annual benefit limitation for a defined contribution plan will be $56,000.

  • Elective deferrals into a plan have been increased to $19,000.

  • The annual compensation limit will now be $280,000.

  • SIMPLE retirement accounts are increased from $12,500 to $13,000.

  • The deductible amount for contributions by an individual to a qualified retirement account is increased from $5,500 to $6,000.

    • Catch-up contribution amounts remain unchanged for those who are eligible.

  • Various phaseouts related to income thresholds for deductibility of IRA contributions and other similar arrangements have also been updated for 2019 with a cost-of-living adjustment.

To read more about changes in the 2019 retirement account limitations and thersholds please refer to https://www.irs.gov/pub/irs-drop/n-18-83.pdf.

As always, before taking action it is advisable to consult with a financial or tax advisor. If you have questions, please feel free to contact us for a further discussion on your concerns or thoughts on different retirement vehicles.

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