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.
Disclosure: (“Hudson Oak”) is a registered investment adviser in the State of New Jersey. For information pertaining to Hudson Oak’s registration status, its fees and services and/or a copy of our Form ADV disclosure statement, please contact Hudson Oak. A full description of the firm’s business operations and service offerings is contained in our Disclosure Brochure which appears as Part 2A of Form ADV. Please read the Disclosure Brochure carefully before you invest.
This article contains content that is not suitable for everyone and is limited to the dissemination of general information pertaining to Hudson Oak’s Wealth Advisory & Management, Financial Planning and Investment services. Past performance is no guarantee of future results, and there is no guarantee that the views and opinions expressed in this presentation will come to pass. Nothing contained herein should be interpreted as legal, tax or accounting advice nor should it be construed as personalized Wealth Advisory & Management, Financial Planning, Tax, Investing, or other advice. For legal, tax and accounting-related matters, we recommend that you seek the advice of a qualified attorney or accountant. This article is not a substitute for personalized planning from Hudson Oak. The content is current only as of the date on which this article was written. The statements and opinions expressed are subject to change without notice based on changes in the law and other conditions.