Employee Benefit Plans: The 411

Valuable Information on 401ks, Pensions, ESOPs, Form 5500 Preparation + More

2019 Retirement plan limits released

The cost-of-living adjustments (COLA) for the 2018 tax year are out. These rates released by the IRS are used to adjust various tax provisions from the standard deduction and personal exemption to retirement plan limits.

Here’s a comparison of the 2019 and 2018 retirement plan limits for 401(k), 403(b) and profit sharing plans:

401(k), 403(b) and Profit sharing plans20192018
401(k) Elective deferrals19,00018,500
Catch-up contributions (age 50 and older)6,0006,000
Defined contribution maximum deferral (employee and employer combined)56,00055,000
Employer annual compensation limit280,000275,000
Annual compensation of “key employees” in a plan designated as top-heavy180,000175,000
Annual compensation of “highly compensated employee” in a plan designated as top-heavy125,000120,000

Why there are 401(k) contribution limits

The retirement plan limits for IRAs are:

IRAs20192018
IRA contribution limit6,0005,500
IRA catch-up contribution1,0001,000
IRA AGI deduction phase-out (starting at):
Joint return103,000101,000
Single or head of household64,00063,0000

For more information, click here.

Kevin C. Bach, CPA, CVA