The word is out… workers are eligible to contribute $500 more to retirement accounts next year.
Good news for those saving for retirement as employees who participate in 401(k), 403(b) and most 457 plans will be able to save $19,000 per year in 2019, up from $18,500 in 2018.
Even better news is workers with slightly higher incomes will also qualify to contribute to Roth IRAs and claim the retirement saver’s tax credit. Here’s how the retirement account rules will change in 2019 (IRS.gov)…
- For single taxpayers covered by a workplace retirement plan, the phase-out range is $64,000 to $74,000, up from $63,000 to $73,000.
- For married couples filing jointly, where the spouse making the IRA contribution is covered by a workplace retirement plan, the phase-out range is $103,000 to $123,000, up from $101,000 to $121,000.
- For an IRA contributor who is not covered by a workplace retirement plan and is married to someone who is covered, the deduction is phased out if the couple’s income is between $193,000 and $203,000, up from $189,000 and $199,000.
- For a married individual filing a separate return who is covered by a workplace retirement plan, the phase-out range is not subject to an annual cost-of-living adjustment and remains $0 to $10,000.
- The income phase-out range for taxpayers making contributions to a Roth IRA is $122,000 to $137,000 for singles and heads of household, up from $120,000 to $135,000. For married couples filing jointly, the income phase-out range is $193,000 to $203,000, up from $189,000 to $199,000. The phase-out range for a married individual filing a separate return who makes contributions to a Roth IRA is not subject to an annual cost-of-living adjustment and remains $0 to $10,000.
Save on Saver’s Credit
The income limit for the Saver’s Credit for low and moderate income workers has also increased.
According to the IRS, the income limit for the Saver’s Credit (also known as the Retirement Savings Contributions Credit) for low- and moderate-income workers is $64,000 for married couples filing jointly, up from $63,000; $48,000 for heads of household, up from $47,250; and $32,000 for singles and married individuals filing separately, up from $31,500.
Take Action in 2019
How much a person needs to save for retirement largely depends on what they intend to do in retirement. If you’re in a good enough financial position to take full advantage of these opportunities, maxing out your retirement savings could make a huge difference to your long-term financial security.
If you’re unsure of your next move, remember it’s never too late – or too early – to plan and invest for the retirement you deserve. Our focus at CKS Summit Group is to bring you fresh new ideas for your retirement income. Our cutting edge tactical portfolios help our clients achieve safe, healthy growth of their savings and preservation of their principal balance.