The Internal Revenue Service (IRS) has set the maximum benefits and contribution limits for the tax year 2019. More information about what has changed for 2019 can be found at the IRS website – 401(k) contribution limit increases to $19,000 for 2019; IRA limit increases to $6,000.
Advisors and Human Resource (HR) professionals should convey to employees their plan contribution limits and encourage those who can defer extra dollars for retirement savings to do so. While not all plan participants will be able to fund their 401(k) accounts up to the maximum, the contribution cap is a goal they should keep in mind.
2019 Maximum Benefits & Contributions Limits Chart
Elective Deferrals 401(k) and 403(b)
$19,000
$18,500
+ $500
457(b)(2) and 457(c)(1)
$19,000
$18,500
+ $500
Section 414(v) Catch-Up Deferrals to 401(k), 403(b), 457(b), or SARSEP Plans
$6,000
$6,000
Defined Benefit Plans
$225,000
$220,000
+ $5,000
Defined Contribution Plans (Annual Additions)
$56,000
$55,000
+ $1,000
Annual Compensation Limit
$280,000
$275,000
+ $5,000
Annual Compensation Limit [Grandfathered Participants in Governmental Plans Which Followed 401(a)(17) Limits (With Indexing) on July 1, 1993]
$415,000
$405,000
+ $10,000
Highly Compensated Employee (HCE)
$125,000
$120,000
+ $5,000
Key Employee/Officer
$180,000
$175,000
+ $5,000
Individual Retirement Accounts (IRA) – Individuals <= 49
$6,000
$5,500
+ $500
Individual Retirement Accounts (IRA) – Individuals >= 50
$7,000
$6,500
+ $500
SIMPLE Retirement Accounts
$13,000
$12,500
+ $5,000
SEP Coverage
$600
$600
SEP Compensation
$280,000
$275,000
+ $5,000
Tax Credit ESOP Maximum Balance
$1,130,000
$1,105,000
+ $25,000
Amount for Lengthening of 5-Year ESOP Period
$225,000
$220,000
+ $5,000
Maximum Amount for Qualified Longevity Annuity Contract Purchases
$130,000
$130,000
Income Subject to Social Security Tax
$132,900
$128,400
+ $4,500
FICA Tax for employers
7.65%
7.65%
FICA Tax for employees
7.65%
7.65%
Social Security Tax for employers
6.2%
6.2%
Social Security Tax for employees
6.2%
6.2%
Medicare Tax for employees and employers
1.45%
1.45%
SECA Tax for self-employed workers
15.3%
15.3%
Social Security Tax for self-employed workers
12.4%
12.4%
Medicare Tax for self-employed workers
2.9%
2.9%
