IRS Increases Most Retirement Plan Limits for 2019
The IRS has released its annual update for the cost-of-living adjustments for 2019. Consistent with last year, elective deferral limits for 401(k) and 403(b) plans increased another $500 from $18,500 to $19,000, the annual compensation limit increased $5,000 from $275,000 to $280,000, the defined contribution plan limit received another $1,000 bump, up to $56,000, and the defined benefit plan limit was again increased $5,000 to $225,000. The Social Security taxable wage base was increased again, but unlike last year (increase of $1,200), this time there will be a larger increase of $4,500 for 2019 to $132,900.
Additional changes were also made this year that increased the SIMPLE IRAs and 401(k) elective deferral limit by $500 from $12,500 to $13,000, the definition of highly compensation employee by $5,000 from $120,000 to $125,000, and changed the definition of key employee in a top heavy plan from an officer with an annual compensation greater than $175,000 to an officer with an annual compensation greater than $180,000.
The new amounts as well as the 2018 amounts are listed in the chart below.
|
2018 |
2019 |
||
| ELECTIVE DEFERRAL ANNUAL LIMITS | |||
| 401(k), 403(b) and SEPs | $18,500 | $19,000 | |
| 457 Plans | $18,500 | $19,000 | |
| SIMPLE IRAs and 401(k)s | $12,500 | $13,000 | |
| CATCH-UP CONTRIBUTIONS | |||
| 401(k), 403(b) and SEPs | $6,000 | $6,000 | |
| SIMPLE IRAs and 401(k)s | $3,000 | $3,000 | |
| COMPENSATION LIMIT | $275,000 | $280,000 | |
| DEFINED BENEFIT PLAN LIMIT | $220,000 | $225,000 | |
| DEFINED CONTRIBUTION PLAN LIMIT | $55,000 | $56,000 | |
| HIGHLY COMPENSATED EMPLOYEE | $120,000 | $125,000 | |
| KEY EMPLOYEE | |||
| Officers | $175,000 | $180,000 | |
| 1% Owner | $150,000 | $150,000 | |
| SOCIAL SECURITY TAXABLE WAGE BASE | $128,400 | $132,900 |