FLASHPOINT: IRS ANNOUNCES 2019 COST OF LIVING ADJUSTMENTS TO VARIOUS RETIREMENT PLAN LIMITS
The IRS just released the cost of living adjustments for various retirement plan limitations that will take effect on January 1, 2019. Many of the limits will be increasing for 2019. The key limits that increased (shown below in bold italics) include the compensation that is taken into account for plan purposes, the salary deferral limit, and the total amount that can be contributed on behalf of any participant in a defined contribution (including 401(k)) plan. The 2019 and prior year limits are as follows:
| For Calendar Year | ||
| 2018 | 2019 | |
| Maximum Defined Benefit Plan Benefit (IRC §415(b)) (applies to limitation years ending in indicated year) | $220,000 | $225,000 |
| Maximum Defined Contribution Annual Addition (IRC §415(c)) (applies to limitation years ending in indicated year) | $55,000 | $56,000 |
| Salary Deferral Limit (IRC §402(g)) | $18,500 | $19,000 |
| Catch-up Limit for 401(k), 403(b), 457 plans (applies to calendar year) | $6,000 | $6,000 |
| HCE Compensation (applies to lookback years in indicated year) | $120,000 | $125,000 |
| Maximum Compensation for Retirement Plan Purposes (IRC §401(a)(17)) (applies to plan years beginning in indicated year) | $275,000 | $280,000 |
| Key Employee: Officer | $175,000 | $180,000 |
| Key Employee: 1% Owner | $150,000 | $150,000 |
| Social Security Taxable Wage Base for OASDI Contributions | $128,400 | $132,900 |
| 457(b) Contribution Limit | $18,500 | $19,000 |
| SIMPLE Salary Deferral Limit | $12,500 | $13,000 |
| SIMPLE Catch-up Limit | $3,000 | $3,000 |
| IRA Contribution Limit | $5,500 | $6,000 |
| SEP Threshold | $600 | $600 |
| ESOP: 5-year Distribution Factor | $220,000 | $225,000 |
| ESOP: Account Balance | $1,105,000 | $1,130,000 |
| Premiums for QLACs | $130,000 | $130,000 |
If you have any questions, please let us know.
- Posted by Ferenczy Benefits Law Center
- On November 1, 2018