The Treasury Department has announced their 2019 retirement account savings limits, and they've been adjusted for inflation, which means you have the chance to save even more for retirement next year. Here are some notable updates:
IRA contributions have been bumped up to $6,000 after holding steady at $5,500 for the past six years.
After six years stuck at $5,500, the amount you can contribute to an Individual Retirement Account is being bumped up to $6,000 for 2019.
The amount you can contribute to your 401(k) or similar workplace retirement plan goes up from $18,500 in 2018 to $19,000 in 2019.
If you're 50 or older, catch-up contribution limits remain unchanged at $6,000 for workplace plans and $1,000 for IRAs.
The overall defined contribution plan limit moves up to $56,000, from $55,000.
High earners and super-savers age 50-plus can sock away $32,000 in these tax-advantaged accounts. If your employer allows aftertax contributions or you’re self-employed, you can save even more. Here's the full chart with updates:
Even though these increases may be great news for retirement savers, you may want to sit down with your financial advisor to make sure you can take advantage of the new limits, especially because most of us simply don't take advantage of these limits.
During 2017, only 13% of employees with retirement plans at work saved the then-statutory maximum of $18,000/$24,000, according to Vanguard’s How America Saves. In plans offering catch-up contributions,14% of those age 50 or older took advantage of the extra savings opportunity.
Need help revising your retirement plan or savings strategy for 2019? Contact the Robin S. Weingast & Associates Team today!