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:
|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|