The IRS recently announced cost of living adjustments that affect dollar limitations for pension plans (and other retirement-related items) for tax year 2019.  Full details can be found in this IRS notice, but the basics are written out below.

Changes for 2019.

The contribution limit has increased from $18,500 to $19,000 for employees who participate in:

  • 401(k)
  • 403(b)
  • Most 457 plans
  • Federal government’s Thrift Savings plan

The limit on annual contributions to an IRA has increased from $5,500 to $6,000 (the last increase was in 2013).

IRA changes.

Also increased for 2019: The income ranges for determining eligibility for making deductible contributions to traditional Individual Retirement Arrangements (IRAs), to contribute to Roth IRAs, and to claim the saver’s credit.

Phase-out ranges.

If taxpayers meet certain conditions, they can deduct contributions to a traditional IRA. If during the year, the taxpayer or his/her spouse was covered by a retirement plan at work, the deduction may be reduced or ‘phased out’, until it is eliminated – depending on filing status and income.

2019 phase-out range increases:

  • Single taxpayers covered by a workplace retirement plan: $64,000 to $74,000.
  • For married couples filing jointly (where the spouse making the IRA contribution is covered by a workplace retirement plan): $103,000 to $123,000.
  • For taxpayers contributing to an IRA not covered by a workplace retirement plan and is married to someone who is covered: Phased out if couple’s income is between $193,000 and $203,000.
  • A spouse filing a separate return who is covered by a workplace retirement plan, phase-out range is not subject to the annual cost of living adjustment: Remains at $0 to $10,000.

The phase-out ranges for Roth IRA contributions are:

  • The income phase-out range for those making contributions to a Roth IRA for singles and heads of the household: $122,000 to $137,000.
  • The income range for married couples filing jointly: $193,000 to $203,000.
  • A spouse filing a separate return who makes contributions to a Roth IRA is not subject to the annual cost of living adjustment: Remains at $0 to $10,000.

Saver’s Credit/

Also known as the Retirement Savings Contributions Credit, the income limit for low and moderate-income workers is:

  • $64,000 for joint filers.
  • $48,000 for heads of household.
  • $32,000 for singles and married separate filers.

Unchanged from 2018.

The additional catch-up contribution limit for those 50 years old and above remains the same for the following:

  • IRA: $1,000.
  • For 401(k), 403(b), SARSEP, and 457: $6,000.
  • For SIMPLE: $3,000.

For more details on all the retirement plan changes, please review the notice from the IRS

Disclaimer: Please note that this is not all inclusive. Our guidance is designed only to give general information on the issues actually covered. It is not intended to be a comprehensive summary of all laws which may be applicable to your situation, treat exhaustively the subjects covered, provide legal advice, or render a legal opinion. Consult your own legal advisor regarding specific application of the information to your own plan.