Many Retirement Plan Dollar Limits Increase for 2019

IRS has announced the 2019 cost-of-living adjustments (COLAs) with respect to retirement plan limits. Many limits are changed for 2019 because the increase in the cost-of-living index met the statutory thresholds that trigger their adjustment.

The following plan limits are increased effective Jan. 1, 2019:

  • Elective deferrals to Code Sec. 401(k) plans, Code Sec. 403(b) plans, and Code Sec. 457 plans increase from $18,500 to $19,000 for 2019.
  • SIMPLE accounts. The maximum amount of compensation an employee may elect to defer for a SIMPLE plan increases from $12,500 to $13,000 for 2019.
  • IRA and Roth IRA contribution limits increase from $5,500 to $6,000 for 2019.
  • Defined benefit plans. The limitation on the annual benefit under a defined benefit plan increases from $220,000 to $225,000 for 2019.
  • Defined contribution plans. The limit on the annual additions to a participant’s defined contribution account under Code Sec. 415(c)(1)(A) increases from $55,000 to $56,000 for 2019.
  • Annual compensation limit. The maximum amount of annual compensation that can be taken into account for various qualified plan purposes increases from $275,000 to $280,000 for 2019.
  • Key employee in top-heavy plan. The dollar limit relating to the definition of a key employee in a top-heavy plan increases from $175,000 to $180,000 for 2019.
  • Highly compensated employee. The dollar limit used in defining a highly compensated employee increases from $120,000 to $125,000 for 2019.

The following plan limits are unchanged:

  • Catch-up contributions for individuals aged 50 or over remains the same – $6,000 for most employer plans, $3,000 for SIMPLE plans, and $1,000 for IRA and Roth IRA contributions.