IRS Increases Retirement Contributions for 2019

November 6, 2018

The Internal Revenue Service announced last week inflation-adjusted figures for retirement account savings for 2019, increasing the amount individuals can contribute to an Investment Retirement Account (IRA) (pretax or Roth or a combination) from $5,500 to $6,000.

The IRS also said the amount workers can contribute to a 401(k) or similar workplace retirement plan (403(b) and most 457 plans) will increase next year from $18,500 to $19,000, although catch-up contribution limits for individuals over 50 remain unchanged at $6,000 for workplace 401(k) plans and $1,000 for IRAs.

The Service says that workers can make changes to their 401(k) elections at any time during the year, not just during open enrollment season when most employers send reminders for the next plan year.

For self-employed and small business owners, the IRS will allow the amount they can save in a SEP IRA or a solo 401(k) to increase in 2019 from $55,000 to $56,000. The compensation limit used in the savings calculation also goes up next year from $275,000 to $280,000.

See IRS Notice 2018-83 for guidance on all retirement and defined benefit plans.