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401(k), IRA Contribution Limits Increase in 2019

12-29-2019 - Beginning in 2019, you will be able to save more in your retirement plans.

 

401(k) plans, 402(b) plans, and most 457 plans: 

If you are under 50 years old, the annual contribution cap is $19,000 (was $18,500).

If you are over 50, the annual contribution cap is $25,000 (was $24,500).

 

Traditional IRA's:

The annual contribution cap is $6,000 (was $5,500).

The "catch up" contribution for those 50 or older remains unchanged at $1,000.

 

Roth IRA's:

Singles, Head of Household, or Married Filing Separately If You Did Not Live With Spouse During The Year:

You may make direct contributions if your income is less than $122,000 (was $120,000). Those under age 50 may contribute up to $6,000. Those age 50 or older may contribute up to $7,000.

You are not permitted to make direct contributions if your income exceeds $137,000 (was $135,000).

If your income is between $122,000 and $137,000 you may make a prorated contribution.

 

Married Couples Filing Jointly:

You may make direct contributions if your income is less than $193,000 (was $189,000). Those under age 50 may contribute up to $6,000. Those age 50 or older may contribute up to $7,000.

You are not permitted to make direct contributions if your income exceeds $203,000 (ws $199,000).

If your income is between $193,000 and $203,000, you may make a prorated contribution.

 

*If your income is too high to contribute to a Roth IRA, it may be possible to first establish a traditional IRA and convert it to a Roth. However, there can be financial repercussions when doing so. See your accountant for guidance. You can also read about Roth IRAs at the Internal Revenue website here.

 

 

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