The IRS (Internal Revenue Service) recently announced an increase in the contribution limit for 2019. Instead of the $18,500 contribution limit for employees, the limit has been increased to $19,000 for 2019. These apply to anyone who participates in 401(k), 403(b), most 457 plans, and the federal government’s Thrift Savings Plan. As for annual contribution to an IRA, the increase has seen the limit rise to $6,000 as opposed to the $5,500 it was previously. This is the first time the contribution limit for IRA’s has been increased since 2013.
There are a few determining factors including age and retirement plans that could alter the conditions. We have broken down the numbers in a simple chart below. Remember that you can contribute to traditional and Roth IRAs and SEP IRAs for 2018 until April 15, 2019.
Traditional IRA
Traditional IRA for people over 50
Roth IRA
Roth IRA for people over 50
401(k) plans
401(k) plans for people over 50
Simple IRA Plans
Simple IRA Plans for people over 50
SEP IRA
2018
$5,500
$6,500
$5,500
$6,500
$18,500
$24,500
$12,500
$15,500
$55,000
2019
$6,000
$7,000
$6,000
$7,500
$19,000
$25,000
$13,000
$16,000
$56,000
As you can see, there have been increases across the board. When changes like this are made, there can be some confusion. If you have any questions or concerns, please don’t hesitate to reach out for more information or clarity.