Cost of Living Adjustments for 2019

Tina M. D'Agata (Nov, 2018)

The IRS has released the Cost of Living Adjustments for 2019.  Many of the dollar limitations relating to qualified retirement plans have been increased, along with other retirement-related items.

Important Changes for 2019:

  • The contribution limit for a participant in a 401(k), 403(b) and most 457 plans has increased to $19,000.00.  The catch up contribution for employees age 50 and over who participate in these plans has remained unchanged at $6,000.00.
  • The contribution limit for individual retirement accounts has been increased to $6,000.00, with the catch up contribution for individuals 50 and over remaining at $1,000.00.
  • The limitation for defined contribution plans under Section 415(c)(1)(A) is increased to $56,000 from $55,000 in 2018.
  • In addition to contribution limits, the income ranges will increase in 2019 for determining eligibility to make deductible contributions to traditional Individual Retirement Accounts, Roth IRAs and to claim the saver’s credit. 

The following chart reflects some of the updated amounts for tax year 2019.

 

ANNUAL PLAN LIMITS

2019

2018

Compensation

280,000

275,000

Highly Compensated Definition

125,000

120,000

Key Employee Definition

180,000

175,000

LIMITS ON BENEFITS & CONTRIBUTIONS

 

 

Defined Contribution Plans

56,000

55,000

Defined Benefit Plans

225,000

220,000

401(k) – 403(b) - & 457 Plan Elective Deferrals

19,000

18,500

Simple Plan Elective Deferrals

13,000

12,500

IRA

6,000

5,500

     CATCH UP CONTRIBUTIONS

 

 

401(k) – 403(b) - & 457 Plans

6,000

6,000

Simple Plans

3,000

3,000

IRA

1,000

1,000

SOCIAL SECURITY TAXABLE WAGE BASE

132,900

128,400

TRADITIONAL IRA DEDUCTION PHASEOUT

 

 

Single, Head of Household – Active Participant

64,000/74,000

63,000/73,000

Married Filing Separate – Any spouse participates

0/10,000

0/10,000

Married Filing Joint – Nonparticipating spouse

193,000/203,000

189,000/199,000

Married Filing Joint – Participating Spouse

103,000/123,000

101,000/121,000

ROTH IRA CONTRIBUTION ELIGIBILITY

 

 

Married Filing Joint

193,000/203,000

189,000/199,000

Single, Head of Household

122,000/137,000

120,000/135,000

Married Filing Separate – Any spouse participates

0/10,000

0/10,000

 

A more detailed account of these changes can be found in Notice 2018-83.   If you have any questions regarding the Cost of Living Adjustments or your 401(k), we encourage you to contact your Dermody, Burke & Brown advisor.