IRS Increases 401(k), IRA and Other Retirement Limits for 2019

The Internal Revenue Service (IRS) has released Notice 2018-83, which details cost-of-living adjustments for retirement contributions in 2019. Section 415 of the Internal Revenue Code requires annual adjustments on benefits and contributions under qualified retirement plans. Employees participating in 401(k), 403(b), most 457 plans and the federal government's Thrift Savings Plan will be able to contribute $19,000 annually, up from the current $18,500 limitation. The catch-up contribution limit for employees 50 or older remains unchanged at $6,000. The IRA contribution limit, unchanged since 2013, will be increased to $6,000, up $500. Other more unusual plans will also see adjustments:

• The limitation on the annual benefit under a defined benefit plan under Section 415(b)(1)(A) is increased from $220,000 to $225,000.
• The limitation used in the definition of “highly compensated employee” under Section 414(q)(1)(B) is increased from $120,000 to $125,000.
• The annual compensation limit under Sections 401(a)(17), 404(l), 408(k)(3)(C), and 408(k)(6)(D)(ii) is increased from $275,000 to $280,000.
• The compensation amount under Section 408(k)(2)(C) regarding simplified employee pensions (SEPs) remains unchanged at $600.
• The limitation under Section 408(p)(2)(E) regarding SIMPLE retirement accounts is increased from $12,500 to $13,000.
• The limitation on deferrals under Section 457(e)(15) concerning deferred compensation plans of state and local governments and tax-exempt organizations is increased from $18,500 to $19,000.