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Information You Can Use - IRS Updates 401(k) Plan Limits for 2019

The IRS has announced an increase to the amount that can be contributed to 401(k) plans in 2019. You will be able to defer $19,000 ($25,000 if you are 50 or over).  

 The annual information release also serves as a great reminder to review your year-to-date contributions for 2018. If you intend to make the maximum salary deferral contributions to your 401(k), take a moment to ensure that you have already maxed out for 2018 or are on track to max out before 12/31. The contribution limit for 2018 is $18,500 ($24,500 if you are 50 or older). 

Things to consider:

  • Have you updated your contributions since the limit was $18,000 or $17,500? 
  • Did you turn 50 this calendar year? If so, did you update your contributions to include the $6,000 catch up contribution? 
  • There’s still time to make up for any shortfalls before the end of 2018.

 Here's a quick chart summarizing some of the updated limits:

Description20182019
401(k) / Roth 401(k) Salary Deferral$18,500$19,000
401(k) / Roth Catch up (age 50 or older)$6,000$6,000
Total Employee + Employer 401(k) Contribution Limit$55,000$56,000
Annual Compensation Limit$275,000$280,000
Highly Compensated Employee Threshold$120,000$125,000
Key Employee (Officer Threshold)$175,000$180,000
Social Security Taxable Wage Base$128,400$132,900
Defined Benefit Maximum Annual Benefit$220,000$225,000

 

Happy Planning,

Ryan