2019 Updates to Your Retirement Contributions

2019 Updates to Your Retirement Contributions

January 08, 2019

Happy New Year!  I sincerely hope one of your resolutions for 2019 was to adopt a mindset of building wealth for now and in the future. One of the best ways to create future wealth is to place money in a retirement account so that it grows tax deferred until you are ready to take it out between the ages of 59 1/2 and 70 1/2.

For 2019, the IRS increased the contributions you can place in your retirement accounts. That's a nice bonus for those of us who like to save. I'll cover the new limits for the most common types of retirement accounts.

Salary Deferral Limits [401(k), 457(b), 403(b)]
You can now increase the amount you place in your employer retirement plan for the year by an additional $500. The new limit goes from $18,500 to $19,000.  It may not sound like much, but with compounding, this extra bump could change how much you pay yourself in the future when you start taking funds out of your account to cover your retirement lifestyle.

SEP and Defined Contribution Limits
For my super saver and self employed individuals, you can now sock away even more! If your employer allows you to make after tax contributions or if you are self employed, the amount you are now eligible to contribute towards your retirement goes up from $55,000 to $56,000.

ROTH IRA and Traditional IRA
After years of being limited to a $5,500 contribution amount, plus catch-ups, the IRA has finally gotten a $500 boost.  The contribution limits for the IRA goes from $5,500 to $6,000 per year with an additional $1000 catch-up contribution for savers 50 and older.

There are no income limits for contributing to the Traditional IRA, but there are limits for making a contribution to the ROTH IRA.  For married couples, the contribution phase out limits have increased from $189,000 -$199,000 in 2018 to $193,000-$203,000 in 2019.  For my single high income earners, you may be eligible to contribute to the ROTH IRA in 2019. The contribution phase out limits have increased from $120,000-$135,000 to $122,000-$137,000. 

So, if you haven't been proactive and already increased the adjustments to your retirement accounts, January is the time to do so.  Get on the phone and call your advisor or the HR department and make the changes today.  Every dollar makes a difference!


About Terrell Dinkins, MBA, ChFC®, CDFA®


Terrell Dinkins, MBA, ChFC®, CDFA® is an investment adviser representative of and offers investment advisory services through OBN Wealth Advisors, LLC, a registered investment adviser offering advisory services in the State of Georgia and other jurisdictions where registered or exempted. Main Office: 950 Eagles Landing Pkwy, Suite 216, Stockbridge, GA 30281. Tel: 404-723-9780. Website: OBN Wealth Advisors