Who's ready to contribute in 2019?
As we get ready to put another year in the history books, we’re also busy getting ready for next year.
Every fall, the IRS provides guidance for making contributions to various account types. We recently learned about the changes coming in 2019.
For clients who are still saving money towards retirement, 2019 will allow for additional tax-deferred and tax-free savings. As financial planners, we’re happy to see these numbers increase! This said, many clients will need to communicate with their HR offices to make changes to their paycheck withholding.
TSP, 401(k), 403(b), and 457 plans have new contribution limits of $19,000. For those age 50 and over, the catch-up provision is still in place and remains unchanged at $6,000, meaning a total of $25,000 can be contributed.
Roth and Traditional IRAs are seeing their first contribution change in 6 years this year – YES!!! The maximum contribution is now $6,000. For those age 50 and over, the catch-up provision is still in place and remains unchanged at $1,000, meaning a total of $7,000 can be contributed.
As always, there are some income rules when making contributions to IRAs. If you would like to contribute to an IRA in addition to your 401(k), please talk with us to make sure you’re eligible.
For SIMPLE IRAs, the contribution limit is now $13,000. For those age 50 and over, the catch up provision is still in place and remains unchanged at $3,000, meaning that a total of $16,000 can be contributed.
Lastly, for those who are self-employed and using individual 401(k) plans, the maximum defined contribution limit has increased to $56,000. For those age 50 and over, the catch-up provision is still in place and remains unchanged at $6,000, meaning a total of $62,000 can be contributed.
In non-retirement news, many clients are looking to gift periodically to family members. In 2019, the gift exclusion amount will remain at $15,000.
For those who have high deductible health plans, and are eligible to contribute to HSAs, we’re excited to share that the self-only contribution limit will be increased to $3,500, and the family contribution limit will increase to $7,000.
If you have any questions about this information, or wonder whether it can or does apply to you and your situation, please give us a call. We would be happy to discuss it in more detail.
The information presented herein is intended to be general in nature and is not intended to be tax or investment advice. Rembert Pendleton Jackson, its employees and representatives are not authorized to give tax advice. Further, guidance from any regulatory body, including the Internal Revenue Service, is subject to interpretation as well as modification by the agency itself at any time. Accordingly the information presented herein may only be correct as of the date written. Readers interested in the presented subject matter should consult with their personal financial and tax professionals, as there is no substitute for personalized advice.