Another year will soon go down in the books … and what a crazy ride! As a point of reference and information, here are a few new updates to the tax laws regarding retirement accounts and contributions.
The I.R.S. just increased the annual contribution limits on IRAs, 401(k)s, and other widely-used retirement plan accounts for 2019. Here is a quick look at the changes.
- Next year, you can put up to $6,000 in any type of IRA. The limit is $7,000 if you will be 50 or older at any time in 2019. (This marks the first increase in yearly IRA contribution limits in six years.)1,2
- Annual contribution limits for 401(k)s, 403(b)s, the federal Thrift Savings Plan, and most 457 plans also get a $500 boost for 2019. The new annual limit on contributions is $19,000. If you are 50 or older at any time in 2019, your yearly contribution limit for one of these accounts is $25,000.2
- Are you self-employed, or do you own a small business? You may have a solo 401(k) or a SEP IRA, which allows you to make both an employer and employee contribution. The ceiling on total solo 401(k) and SEP IRA contributions rises $1,000 in 2019 to $56,000.2
- If you have a SIMPLE retirement account, next year’s contribution limit is $13,000, up $500 from the 2018 level. If you are 50 or older in 2019, your annual SIMPLE plan contribution cap is $16,000.2
- Yearly contribution limits have also been set a bit higher for Health Savings Accounts (which may be used to save for retirement medical expenses). The 2019 limits: $3,500 for individuals with single medical coverage, and $7,000 for those covered under qualifying family plans. If you are 55 or older next year, those respective limits are $1,000 higher.1
As always, be sure to contact your tax consultant with specific questions or run your thoughts past your financial advisor.
I hope everyone had a fantastic 2018, and I wish you all a Merry Christmas and Happy New Year. Buckle up – 2019 is already shaping up to be interesting!
- cbsnews.com/news/here-are-2019s-higher-limits-for-retirement-savings-accounts/ [11/1/18]
- forbes.com/sites/ashleaebeling/2018/11/01/irs-announces-2019-retirement-plan-contribution-limits-for-401ks-and-more/ [11/1/18]
This material was prepared by MarketingPro, Inc. for use by Joel P. LaGore