Every year, the IRS adjusts the individual contribution limits, which sets how much money you can put aside annually into your 401(k) or IRA. After no change from 2017 to 2018, the good news this year is the IRS recently announced that the contribution limits for calendar year 2019 will increase.
Here’s the quick summary:
- The 2019 401(k) contribution limit is $19,000
- The 2019 IRA contribution limit is $6,000
- The 401(k) additional catch-up contribution limit for 2019, for those over age 50, remains unchanged at $6,000
- The IRA additional catch-up contribution limit for 2019, for those over age 50, remains unchanged at $1,000
1. The New 2019 401(k) Contribution Limit
For 2019, you will be able to contribute $19,000 to your 401(k). This is an increase of $500 from the 2018 tax year limit of $18,500.
Remember, this is just the deductible limit on your personal contribution. If your employer has a matching program, their contribution to your 401(k) does not count against these limits.
2. The New 2019 IRA Contribution Limit
The IRA contribution limit also increased this year by $500 – from $5,500 in 2018 to $6,000 in 2019.
Don’t forget, not everyone is eligible to contribute directly to an IRA account, due to income limitation rules. The backdoor Roth IRA contribution is an easy workaround though.
3. The New 2019 Catch-Up Limits if Over Age 50
If you are over age 50, you are allowed to make an additional catch-up contribution. However, these limits did not change from 2018.
For your 401(k), the catch-up contribution limit is still $6,000. For your IRA, the catch-up contribution limit remains $1,000.
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