401(k) Contribution Limit Increases for 2019

If you offer a 401(k) plan at your small business, you and your employees will see some changes to 401(k) contribution limits in 2019. Specifically, contribution limits for employees who participate in 401(k), 403(b), and other select government savings plans will increase from $18,500 to $19,000.

Along with this change, there are a few other highlights for 2019 that might be helpful for you or your employees to know:

• The annual overall limit on contributions to a participant’s account has increased to $56,000 for 2019 (or capped at 100% of the participant’s salary if they are paid less than $56,000).

• For participants over the age of 50, catch-up contributions remain at $6,000, in addition to the $19,000 limit.

• The annual limit for IRA contributions will increase for the first time since 2013 to $6,000.

• The qualifying income cap for the Saver’s Tax Credit for workers has increased to $64,000 for married couples filing jointly, $48,000 for heads of household, and $32,000 for single filers.

For a comprehensive list of contribution limit increases for 2019, check out our resource: 2019 401(k) Contribution Limits for Retirement Plans.

2019 401(k) Contribution Limits

Description 2019 2018
Elective Deferral Limit* $19,000 $18,500
Annual Contribution Limit $56,000 $55,000
Annual Compensation Limit $280,000 $275,000
HCE Threshold** $125,000 $120,000

 

 

 

 

 

 

 

 

 

*Catch-up provision of $6,000 per year available to all employees age 50 and older during the calendar year.

**A highly compensated employee (HCE) is an employee who earned more than $120,000 in the preceding year, as well as any 5% owner.

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