Planned Giving »»»
Thursday November 15, 2018
IRA and 401(k) Contributions in 2019
On November 1, 2018, the IRS announced the 401(k) and IRA contribution limits for 2019. The IRA limit increases from $5,500 in 2018 to $6,000 in 2019. Individuals over age 50 may make a catch-up contribution of $1,000, for a total transfer of $7,000 in 2019.
Traditional IRA contributions from earned income are tax deductible. The traditional IRA has two main tax benefits - contributions are tax deductible and grow tax free. If you are covered by a qualified retirement plan at your work place, the IRA deduction may be reduced or phased out.
The Roth IRA phaseout limits also increase in 2019.
If your employer offers both a traditional 401(k) and a Roth 401(k) plan, you may allocate your employee contribution to one or both funds. The traditional 401(k) amounts are deductible, but the Roth 401(k) contributions are after-tax.
Many employers match their employees' 401(k) contributions. This is a good way to encourage employee participation in a 401(k) plan. The employer match is used to fund the employees' traditional 401(k) accounts. Employees may still make contributions to Roth 401(k) accounts up to the $19,000 or $25,000 limit.
Published November 2, 2018