Retirement Plans: 2018 Limits versus 2019 Limits
12/11/2018
by Alex Baker, Senior Accountant, CPA
The Treasury Department has announced inflation-adjusted figures for retirement account savings for 2019, and there are a lot of changes that will help your employees save more. The chart below compares retirement plan limits for 2018 versus the new limits for 2019.
|
|
2018 limit |
2019 limit |
|
Elective deferrals to 401(k), 403(b) and 457(b) plans |
$18,500 |
$19,000 |
|
Annual benefit for defined benefit plans |
$220,000 |
$225,000 |
|
Contributions to defined contribution plans |
$55,000 |
$56,000 |
|
Contributions to SIMPLEs |
$12,500 |
$13,000 |
|
Contributions to IRAs |
$5,500 |
$6,000 |
|
Catch-up contributions to 401(k), 403(b) and 457(b) plans |
$6,000 |
$6,000 |
|
Catch-up contributions to SIMPLEs |
$3,000 |
$3,000 |
|
Catch-up contributions to IRAs |
$1,000 |
$1,000 |
|
Compensation limit for benefit purposes for qualified plans and SEPs |
$275,000 |
$280,000 |
|
Minimum compensation for SEP coverage |
$600 |
$600 |
|
Highly compensated employee threshold |
$120,000 |
$125,000 |
|
Minimum income for “key employee” status for top-heavy calculation |
$175,000 |
$180,000 |
|
Income subject to Social Security tax |
$128,400 |
$132,900 |
HR Departments should plan to adjust their systems for next year and to inform employees about the new limits in year-end open enrollment materials. Because the IRS announced the 2019 contribution changes so close to the fall open enrollment period, many plan sponsors may need to provide addendums to benefits materials that have already been distributed. If you have any questions, please contact your VonLehman advisor.
