The Internal Revenue Service (IRS) has released Notice 2018-83, which details cost-of-living adjustments for retirement contributions in 2019. Section 415 of the Internal Revenue Code requires annual adjustments on benefits and contributions under qualified retirement plans.

IRS-announces-cola-adjustmentsEmployees participating in 401(k), 403(b), most 457 plans and the federal government’s Thrift Savings Plan will be able to contribute $19,000 annually, up from the current $18,500 limitation. The catch-up contribution limit for employees 50 or older remains unchanged at $6,000.

The IRA contribution limit, unchanged since 2013, will be increased to $6,000, up $500.

Other more unusual plans will also see adjustments:

  • The limitation on the annual benefit under a defined benefit plan under Section 415(b)(1)(A) is increased from $220,000 to $225,000.
  • The limitation used in the definition of “highly compensated employee” under Section 414(q)(1)(B) is increased from $120,000 to $125,000.
  • The annual compensation limit under Sections 401(a)(17), 404(l), 408(k)(3)(C), and 408(k)(6)(D)(ii) is increased from $275,000 to $280,000.
  • The compensation amount under Section 408(k)(2)(C) regarding simplified employee pensions (SEPs) remains unchanged at $600.
  • The limitation under Section 408(p)(2)(E) regarding SIMPLE retirement accounts is increased from $12,500 to $13,000.
  • The limitation on deferrals under Section 457(e)(15) concerning deferred compensation plans of state and local governments and tax-exempt organizations is increased from $18,500 to $19,000.