The 2019 retirement plan limits have recently been announced by the IRS.<\/p>\n
These new limits are effective January 1, 2019.<\/p>\n
If you are an employee and a retirement plan participant, be sure to contact your employer as soon as possible if you wish to change your retirement plan salary deferrals for 2019. Of course, if you\u2019re a Springwater client, we\u2019re happy to assist!<\/p>\n
If you are an employer and either don\u2019t have a retirement plan in place or have questions about your existing one, please contact us for a complimentary tailor-made proposal and comparison with your current plan. You\u2019ll have happier, more satisfied employees while also saving money.<\/p>\n
401(k)s, 403(b)s, etc<\/strong>. The standard contribution limit for employee salary deferrals to a qualified retirement plan \u2013 401(k), 403(b), most 457 plans, and the government\u2019s Thrift Savings Plan \u2013 increases to $19,000 for 2019 (was $18,500 for 2018).<\/p>\n The \u201cCatch-up\u201d<\/strong>. The \u201ccatch-up\u201d deferral limit for these plans remains at $6,000, so a person who is age 50 or older can defer a maximum of $25,000 in 2019 ($19,000 deferral plus $6,000 catch-up).<\/p>\n Annual Defined Contribution Limit<\/strong>. The maximum \u201cannual additions\u201d limit (salary deferrals, plus profit sharing, plus forfeiture allocations, etc) to a defined contribution plan is increased to $56,000 for 2019 (from $55,000 for 2018). Note that the catch-up deferral is in addition to this, so the annual contribution limit for a person age 50 or older is $62,000.<\/p>\n SEP IRAs<\/strong>. The contribution limit for a SEP IRA in 2019 is increased to the lesser of (a) $56,000, or (b) 25% of the employee\u2019s salary. [Note that a special computation is required to determine the contribution amount for self-employed individuals contributing for themselves]. The compensation limit used in the savings calculation is increased to $280,000 for 2019 (was $275,000 for 2018).<\/p>\n Solo 401(k)s<\/strong>. The contribution limit for a Solo 401(k) in 2019 is increased to the lesser of (a) $56,000, or (b) 100% of the employee\u2019s salary. Note that the catch-up deferral is in addition to this, so the annual contribution limit for a person age 50 or older is $62,000.<\/p>\n IRAs<\/strong>. The contribution limits for Traditional and Roth IRAs is increased to $6,000 (was $5,500 for 2018). This is the first increase in the IRA contribution limit since 2013. The catch-up contribution for a person age 50 or older remains at $1,000 in 2019, for a total of $7,000.<\/p>\n Simple IRAs<\/strong>. The contribution limit for a Simple IRA is increased to $13,000 for 2019 (was $12,500 in 2018). The catch-up contribution for a person age 50 remains at $3,000, for a total of $16,000.<\/p>\n Defined Benefit Plans<\/strong>. Finally, the limitation on the annual benefit of a \u201cdefined benefit\u201d plan in 2019 is $225,000, up from $220,000 for 2018.<\/p>\n