Get Ready to Save More in 2019!
It’s never too early to start planning for new year resolutions. And, if you’re thinking ‘saving more’ is good one to put on the list, there’s good news! Starting in 2019, you’ll be able to put more into your retirement accounts.
The Treasury Department recently announced inflation-adjusted contribution limits for 2019, and there are a lot of little changes to help savers accumulate even more for their retirement. For details, read on…
IRA and Roth IRA
After six years stuck at $5,500, the amount is being bumped up to $6,000 for 2019. If you are age 50 or older, you’ll be able to put in an extra $1,000, for a total of $7,000.
401(k) / 403(b) / 457
The amount you can contribute to your workplace retirement plan goes up from $18,500 to $19,000 in 2019. Catch-up contributions for those age 50+ are $6,000, for a total potential contribution of $25,000.
SEP IRA and Solo 401(k)
For those who are self-employed or own a small business, the limit rises from $55,000 to $56,000 in 2019, assuming they reach the top compensation limit of $280,000.
The limit on SIMPLE retirement accounts rises from $12,500 to $13,000. For those 50 or older, a catch-up contribution of $3,000 is also allowed, for a total contribution of $16,000.
Health Savings Account (HSA)
If you have a qualifying high-deductible health plan that provides family coverage, the annual HSA contribution limit increases from $6,900 to $7,000. Those with single coverage may put in $3,500 (up from $3,450). Also, if you’ll be 55 or older anytime during 2019, you’ll be able to contribute an extra $1,000 to your HSA.
Although some of these increases may not seem very significant, maxing out your contribution limits can make a big difference over time. Plus, many retirement contributions provide a tax benefit.
Talk with your planner to see how your retirement plan would be impacted by taking advantage of the new, higher contribution amounts. Every little bit helps!
Written By Kimberly S. Baker, CFP®