Leonard Golub, CFA, MBA
Fiduciary Advisor
4119 Montrose Blvd
Suite 400
Houston, TX 77006
800-724-9866
info@newcapitalmgmt.com
newcapitalmgmt.com View Bio

March 22, 2019

2019 Key Numbers
 

Retirement Planning

Employee/individual contribution limits

Elective deferral limits20192020
401(k) plans, 403(b) plans, 457(b) plans, and SAR-SEPs 1 [Includes Roth 401(k) and Roth 403(b) contributions]Lesser of $19,000 or 100% of participant's compensation Lesser of $19,500 or 100% of participant's compensation
SIMPLE 401(k) plans and SIMPLE IRA plans1Lesser of $13,000 or 100% of participant's compensation Lesser of $13,500 or 100% of participant's compensation

1 Must aggregate employee contributions to all 401(k), 403(b), SAR-SEP, and SIMPLE plans of all employers. 457(b) plan contributions are not aggregated. For SAR-SEPs, the percentage limit is 25% of compensation reduced by elective deferrals (effectively, a 20% maximum contribution).

IRA contribution limits20192020
Traditional IRAsLesser of $6,000 or 100% of earned income Lesser of $6,000 or 100% of earned income
Roth IRAsLesser of $6,000 or 100% of earned income Lesser of $6,000 or 100% of earned income
Additional "catch-up" limits (individuals age 50 or older)20192020
401(k) plans, 403(b) plans, 457(b) plans, and SAR-SEPs2$6,000 $6,500
SIMPLE 401(k) plans and SIMPLE IRA plans$3,000$3,000
IRAs (traditional and Roth)$1,000$1,000

2 Special catch-up limits may also apply to 403(b) and 457(b) plan participants.

Employer contribution/benefit 3 limits

Defined benefit plan limits20192020
Annual contribution limit per participantNo predetermined limit. Contributions based on amount needed to fund promised benefitsNo predetermined limit. Contributions based on amount needed to fund promised benefits
Annual benefit limit per participantLesser of $225,000 or 100% of average compensation for highest three consecutive years Lesser of $230,000 or 100% of average compensation for highest three consecutive years
Defined contribution plan limits [qualified plans, 403(b) plans, SEP, and SIMPLE plans]20192020
Annual addition limit per participant (employer contributions; employee pre-tax, after-tax, and Roth contributions; and forfeitures) (does not apply to SIMPLE IRA plans)Lesser of $56,000 or 100% (25% for SEP) of participant's compensation Lesser of $57,000 or 100% (25% for SEP) of participant's compensation
Maximum tax-deductible employer contribution [not applicable to 403(b) plans]25% of total compensation of employees covered under the plan (20% if self employed) plus any employee pre-tax and Roth contributions; 100% for SIMPLE plans 25% of total compensation of employees covered under the plan (20% if self employed) plus any employee pre-tax and Roth contributions; 100% for SIMPLE plans

3 For self-employed individuals, compensation generally means earned income. This means that, for qualified plans, deductible contributions for a self-employed individual are limited to 20% of net earnings from self-employment (net profits minus self-employment tax deduction), and special rules apply in calculating the annual additions limit.

Compensation limits/thresholds

Retirement plan compensation limits20192020
Maximum compensation per participant that can be used to calculate tax-deductible employer contribution (qualified plans and SEPs)$280,000 $285,000
Compensation threshold used to determine a highly compensated employee$125,000 (when 2019 is the look-back year) $130,000 (when 2020 is the look-back year)
Compensation threshold used to determine a key employee in a top-heavy plan$1 for more-than-5% owners, $180,000 for officers, $150,000 for more-than-1% owners$1 for more-than-5% owners, $185,000 for officers, $150,000 for more-than-1% owners
Compensation threshold used to determine a qualifying employee under a SIMPLE plan$5,000 $5,000
Compensation threshold used to determine a qualifying employee under a SEP plan$600 $600
Traditional deductible IRA income limits — Income phase-out range for determining deductibility of traditional IRA contributions for taxpayers covered by an employer-sponsored plan and filing as:20192020
Single$64,000 - $74,000 $65,000 - $75,000
Married filing jointly$103,000 - $123,000$104,000 - $124,000
Married filing separately$0 - $10,000 $0 - $10,000
Traditional deductible IRA income limits — Income phase-out range for determining deductibility of traditional IRA contributions for taxpayers not covered by an employer-sponsored retirement plan but filing a:20192020
Joint return with a spouse who is covered by an employer-sponsored retirement plan$193,000 - $203,000 $196,000 - $206,000
Roth IRA compensation limits — Income phase-out range for determining ability to fund Roth IRA for taxpayers filing as:20192020
Single$122,000 - $137,000 $124,000 - $139,000
Married filing jointly$193,000 - $203,000 $196,000 - $206,000
Married filing separately$0 - $10,000 $0 - $10,000
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The information contained herein is based on sources believed to be reliable, but its accuracy cannot be guaranteed. The articles, information, calculators, and opinions presented herein are for general information only and are not intended to provide specific advice or recommendations for any individual. New Capital Management does not provide tax, accounting, or legal advice. All decisions regarding the tax or legal implications of your investments and finances should be made with your tax or legal advisor. New Capital Management is not a bank, mortgage lender, or broker. Nothing herein should be construed as an offer or commitment to lend. Any calculations are provided as educational tools, are hypothetical in nature, depend wholly on information you provide, do not assume the effects of all pertinent factors, and are not intended to provide investment advice or serve as a financial plan.



This communication is strictly intended for individuals residing in the state(s) of TX. No offers may be made or accepted from any resident outside the specific states referenced.

Prepared by Broadridge Advisor Solutions Copyright 2019.