2019 Retirement Contribution Limits: What You Need to Know
- Retirement savers received welcome news as the Internal Revenue Service (IRS) announced cost of living adjustments to retirement plan contribution limits for 2019.
- The annual contribution limit for 401(k) plans will increase to $19,000, up from $18,500.
- stephanie Bacak, a financial planner at Capstone Global Advisors, hailed the IRS announcement as "another win for investors and savers." She emphasized the importance of the IRA increase,...
Secure your financial future: The IRS has announced increased retirement contribution limits for 2019, giving you more prospect to save. Get ready to maximize your 401(k) contributions, which rise to $19,000, and boost your IRA contributions, now at $6,000. Review the updated income ranges impacting, IRA deductions, and Roth IRA eligibility to strategize your saving. News Directory 3 delivers the essential numbers,ensuring you’re fully informed about these vital changes. Whether you are a seasoned investor or just starting, understanding these new limits is critical for retirement planning. Discover what’s next for your nest egg.
IRS Announces Increased Retirement Contribution Limits for 2019
Updated November 1,2018
Retirement savers received welcome news as the Internal Revenue Service (IRS) announced cost of living adjustments to retirement plan contribution limits for 2019. These adjustments impact 401(k)s, iras, and other retirement-related plans, offering individuals greater opportunities to bolster their retirement savings.
The annual contribution limit for 401(k) plans will increase to $19,000, up from $18,500. Similarly, the annual IRA contribution limit, which was last raised in 2013, will rise to $6,000 from $5,500.These changes provide a significant boost for individuals looking to maximize their retirement savings through these popular plans.
stephanie Bacak, a financial planner at Capstone Global Advisors, hailed the IRS announcement as “another win for investors and savers.” She emphasized the importance of the IRA increase, stating it provides “a great opportunity for so many to be more prepared for retirement.”
Catch-up contributions, designed for those age 50 and over, will remain at $6,000 for 401(k)s and $1,000 for IRAs. The IRS also confirmed that contribution limits will increase to $19,000 for 403(b)s, most 457 plans, and the federal government’s Thrift Savings Plan.
Along with contribution limits, the income ranges that determine eligibility for deductible IRA contributions, Roth IRAs, and the saver’s credit will also increase in the coming year. For single taxpayers and heads of household, the income phase-out range for Roth IRA contributions rises to $122,000 to $137,000, up from $120,000 to $135,000. For married couples filing jointly,the range increases to $193,000 to $203,000,from $189,000 to $199,000.
Shane Mason, a certified financial planner at Brooklyn FI, notes that while the IRS increases are beneficial, they are most impactful for those who can contribute the maximum amount. He advises individuals aiming to max out their 401(k) to review their current contributions to ensure they are on track.
For those paid semi-monthly, Mason recommends contributing $792 per paycheck. Biweekly paychecks require a contribution of $731 to reach the maximum 401(k) contribution for 2019.
“This is another win for investors and savers. For so long there were really no cost of living increases in the IRA so it is indeed a great opportunity for so many to be more prepared for retirement.”
What’s next
As 2019 approaches, individuals should review their retirement savings strategies and take advantage of these increased contribution limits to secure a more agreeable financial future.Consult with a financial advisor to determine the best approach for your specific circumstances.