The IRS has announced an increase to the amount that can be contributed to 401(k) plans in 2019. You will be able to defer $19,000 ($25,000 if you are 50 or over).
The annual information release also serves as a great reminder to review your year-to-date contributions for 2018. If you intend to make the maximum salary deferral contributions to your 401(k), take a moment to ensure that you have already maxed out for 2018 or are on track to max out before 12/31. The contribution limit for 2018 is $18,500 ($24,500 if you are 50 or older).
Things to consider:
- Have you updated your contributions since the limit was $18,000 or $17,500?
- Did you turn 50 this calendar year? If so, did you update your contributions to include the $6,000 catch up contribution?
- There’s still time to make up for any shortfalls before the end of 2018.
Here's a quick chart summarizing some of the updated limits:
| Description | 2018 | 2019 |
| 401(k) / Roth 401(k) Salary Deferral | $18,500 | $19,000 |
| 401(k) / Roth Catch up (age 50 or older) | $6,000 | $6,000 |
| Total Employee + Employer 401(k) Contribution Limit | $55,000 | $56,000 |
| Annual Compensation Limit | $275,000 | $280,000 |
| Highly Compensated Employee Threshold | $120,000 | $125,000 |
| Key Employee (Officer Threshold) | $175,000 | $180,000 |
| Social Security Taxable Wage Base | $128,400 | $132,900 |
| Defined Benefit Maximum Annual Benefit | $220,000 | $225,000 |
Happy Planning,
Ryan