Posted by Saaib T. Uppal, CPA
The IRS has announced cost-of-living adjustments that should be noted for retirement planning purposes.
Below is a chart that outlines employee benefit plan limits for 2019:
| PLAN LIMITS | ||||
| RETIREMENT & SOCIAL SECURITY | 2019 Limit | 2018 Limit | 2017 Limit | |
| Section 401(k), 403(b), 457(b) elective deferrals | $19,000 | $18,500 | $18,000 | |
| 401(k) or 403(b) catch up contributions | 6,000 | 6,000 | 6,000 | |
| Section 415 – Defined contribution plan maximum annual contributions without catch up | 56,000 | 55,000 | 54,000 | |
| Section 415 – Defined benefit plan maximum annual benefit | 225,000 | 220,000 | 215,000 | |
| Section 414(q)(1)(B) – Highly compensated employee -minimum compensation (applies to look back years in indicated year) | 125,000 | 120,000 | 120,000 | |
| Section 416 – Key employee definition – officer compensation | 180,000 | 175,000 | 175,000 | |
| Section 416 – Key employee definition – 1% owner compensation | 150,000 | 150,000 | 150,000 | |
| Section 401(a)(17) – Maximum includible annual compensation | 280,000 | 275,000 | 270,000 | |
| IRA or Roth IRA annual contribution limit | 6,000 | 5,500 | 5,500 | |
| IRA or Roth IRA annual catch up contributions | 1,000 | 1,000 | 1,000 | |
| SIMPLE Salary Deferral Limit | 13,000 | 12,500 | 12,500 | |
| SIMPLE Catch-up Limit | 3,000 | 3,000 | 3,000 | |
Plan administrators should ensure they pass along this new information to their participants so they have all the required information when planning their deferrals for 2019.
