Pension & Benefits News 2019 COLAs for retirement plan dollar limits released
News
Monday, November 12, 2018

2019 COLAs for retirement plan dollar limits released

By Pension and Benefits Editorial Staff

The IRS has released the 2019 cost-of-living adjustments to retirement plan limits. A few of the pension plan limitations will not change for 2019 because the increase in the cost-of-living index did not meet the statutory thresholds that trigger their adjustment. However, other limitations will change because the increase in the index did meet the statutory thresholds. 

Employee benefit plans are subject to annually adjusted dollar limitations on benefits, contributions, compensation and other items. Annual benefit limits are generally calculated based on inflation data from the third fiscal quarter of each year. Adjustments in the limits are rounded down and may not take effect until certain minimum dollar amounts are reached. 

Increased 2019 plan limits. Highlights of the 2019 maximum dollar limitations that changed from 2018 include the following: 

  • Annual defined benefit limit: $225,000, up from $220,000 in 2018;
  • Annual defined contribution limit: $56,000, up from $55,000 in 2018;
  • Elective deferral limit: $19,000, up from $18,500 in 2018;
  • Annual compensation limit: $280,000, up from $275,000 in 2018;
  • Annual contribution limit for IRAs: $6,000, up from $5,500 in 2018;
  • Annual limit for SIMPLE plans: $13,000, up from $12,500 in 2018;
  • Dollar limit for key employees in a top-heavy plan: $180,000, up from $175,000 in 2018; and
  • Highly compensated employee limit: $125,000, up from $120,000 in 2018.

Unchanged 2019 plan limits.  Highlights of the 2019 maximum dollar limitations that did not change include the following: 

  • Catch-up contribution limit for 401(k) plans for employees age 50 and over: $6,000, unchanged from 2018;
  • Catch-up contribution limit for SIMPLE 401(k) plans and SIMPLE IRAs for employees age 50 and over: $3,000, unchanged from 2018;
  • SEP coverage amount: $600, unchanged from 2018; and
  • Dollar limit on premiums paid with respect to a qualified longevity annuity: $130,000, unchanged from 2018.

IRAs. The income phase-out range for IRA contributions for single taxpayers covered by a workplace retirement plan is $64,000 to $74,000 for singles, up from $63,000 to $73,000 in 2018. For married couples filing jointly, where the spouse making IRA contributions is covered by a workplace retirement plan, the income phase-out range is $103,000 to $123,000, up from $101,000 to $121,000. The income phase-out range for an IRA contributor who is not covered by a workplace retirement plan and is married to someone who is covered is $193,000 to $203,000, up from $189,000 to $199,000. The phase-out range for a married individual filing a separate return who is covered by a workplace retirement plan is not subject to an annual cost-of-living adjustment and remains $0 to $10,000. 

The income phase-out range for taxpayers making contributions to a Roth IRA is $122,000 to $137,000 for singles and heads of household, up from $120,000 to $135,000 in 2018. For married couples filing jointly, the income phase-out range is $193,000 to $203,000, up from $189,000 to $199,000. The phase-out range for a married individual filing a separate return who makes contributions to a Roth IRA is not subject to an annual cost-of-living adjustment and remains $0 to $10,000. 

SOURCE: IRS News Release IR-2018-211.

Back to Top

Interested in submitting an article?

Submit your information to us today!

Learn More