For the first time since 2013, the IRS is increasing the annual limit for IRA contributions. In 2019, you’ll be allowed to save an additional $500 per year, increasing the limit to to $6,000. Similar increases have been approved for 401(k)s, 403(b)s and most 457 plans. Please see details below:
401(k) Deferral Limit – Increase from $18,500 to $19,000
Catch-up Deferral Limit – Remains at $6,000
Defined Contribution Plan Maximum Annual Additions – Increase from $55,000 to $56,000 (or $62,000 with catch-up)
Defined Benefit Plan Maximum Annual Benefit – Increase from $220,000 to $225,000
Annual Compensation Limit – Increase from $275,000 to $280,000
HCE Compensation Limit – Increase from $120,000 to $125,000
Allocating income to these tax-deferred accounts is a crucial step in achieving your financial objectives and should be part of a well thought out financial plan.