2019 Retirement Plan Contributions
Posted: Bradley Hlavinka
As seen in Fort Bend CEO magazine
Here is some helpful information regarding retirement plan contributions that you should be aware of for 2019.
401(k), 403(b) & 457 Plan Contributions
The 2019 limit on annual contributions is $19,000. The additional catch-up deferral limit for individuals age 50 and older is $6,000. Thus, if you are age 50 or older in 2019, you can make 401(k), 403(b) and 457 plan deferrals of up to $25,000. Please note deferrals can only take place during the calendar year. If your goal is to max out your annual deferrals, it’s a good idea to review your paystub to make sure you’re on track to max out your deferrals before year-end.
Traditional & Roth IRA Contributions
The new limit on annual contributions to an IRA is $6,000. The additional catch-up contribution limit for individuals aged 50 and older is $1,000. Thus, if you are age 50 or older in 2019, you can make an IRA contribution of up to $7,000. Please note you can only make an IRA contribution up to the amount of earned income you had during the calendar year.
The deduction for taxpayers making contributions to a traditional IRA is phased out for single people who are covered by a workplace retirement plan and have a modified adjusted gross income (AGI) of between $64,000 and $74,000. For married couples filing jointly, in which the spouse who makes the IRA contribution is covered by a workplace retirement plan, the income phase-out range is $103,000 to $123,000. For an IRA contributor who is not covered by a workplace retirement plan and is married to someone who is covered, the deduction is phased out if the couple’s income is between $193,000 and $203,000.
The 2019 AGI phase-out range for taxpayers making contributions to a Roth IRA is $193,000 to $203,000 for married couples filing jointly. For single people, the income phase-out range is $122,000 to $137,000.
Simple IRA Contributions
The limit on deferrals to a Simple IRA is $13,000. However, if you are age 50 or older in 2019, you can make a Simple IRA employee deferral of up to $16,000.
SEP IRA Contributions
A Simplified Employee Pension (SEP) IRA is the only retirement plan that can be opened and funded after the calendar year. You have until the tax-filing deadline to open and fund a SEP IRA. Self-employed individuals may contribute up to 25 percent of their income to a SEP IRA up to the $55,000 limit for 2018 and $56,000 for 2019. This is a great option for self-employed individuals looking to save for retirement as well as reduce their tax bills.
WJ Interests, LLC, has provided fee-only financial advice to individuals, families and businesses since 1996. For more information, please contact us at firstname.lastname@example.org or 281-634-9400.