It’s that time of year once again when the United States Internal Revenue Service has announced its 2019 limitations on retirement plans for the 2019 tax year. Human resources and payroll should update their systems and employee communications as appropriate reflecting changes effective January 1, 2019.

Limits
Defined Contribution Plans
401(k), 403(b), 457 & Most Federal Thrift Savings Plans
20182019
Maximum elective deferral (employee)$18,500$19,000
Maximum contribution – all sources (employee & employer)$55,000$56,000
Age 50+* catch-up contribution (employee)$6,000$6,000
Age 50+* maximum contribution – all sources plus catch up (employee & employer)$61,000$62,000
Compensation ceiling for calculating contributions$275,000$280,000
Nondiscrimination testing – compensation limitation for “key employees”$175,000$180,000
Nondiscrimination testing – compensation limitation for “highly compensated employees”$120,000$125,000

 

Limits
Defined Benefit Plans
20182019
Annual benefit limitation$220,000 $225,000

The IRS also announced the Individual Retirement Account (IRA) limits effective January 1, 2019:

Limits
Individual Retirement Accounts
20182019
Annual contribution limit$5,500$6,000
Age 50+* annual catch-up contribution not subject to annual cost-of-living adjustment$1,000$1,000

*If age 50+ by year-end

Additional information on the 2019 limitations on retirement plans and further technical guidance may be found in the IRS source documents as noted below:

IRS Bulletin IR-2018-211
IRS Notice 2018-83

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