retirement

Contribute More to Retirement Accounts in 2019

Retirement savers can stash an extra $500 in IRA and 401(k) plans, and the income limits for contributing to a Roth are higher.

Question: How much can I contribute to my IRA and 401(k) in 2019? What are the income limits to qualify for a Roth?

Answer: You’ll be able to contribute slightly more to your retirement savings in 2019. The contribution limit for a 401(k), 403(b), 457 plan or the federal government’s Thrift Savings Plan rises from $18,500 to $19,000 in 2019. You can continue to contribute an extra $6,000 if you’re 50 or older.

IRA contribution limits (whether for traditional or Roth IRAs) are increasing for the first time since 2013, from $5,500 to $6,000 for 2019. You can continue to add an extra $1,000 catch-up contribution if you’re 50 or older.

The income limit to contribute to a Roth IRA increases slightly in 2019. Single filers and those filing as head of household can contribute the full amount to a Roth IRA if their modified adjusted gross income is less than $122,000, with the contribution amount gradually phasing out until their income reaches $137,000 (up $2,000 from 2018). Joint filers can contribute the full amount to a Roth if their modified adjusted gross income is less than $193,000, with the amount gradually phasing out until their income reaches $203,000 (up $4,000 from 2018).

Single taxpayers and head of household filers who are covered by a workplace retirement plan can deduct their traditional IRA contributions if their income is less than $64,000, with the amount gradually phasing out until their income reaches $74,000 (up $1,000 from 2018). For married couples filing jointly, if the spouse making the IRA contribution is covered by a workplace retirement plan, the income phase-out is $103,000 to $123,000 (up $2,000 from 2018).

If you are not covered by a retirement plan at work but your spouse is, you can deduct your full contribution if your joint income is less than $193,000, with the deduction gradually phasing out until your income reaches $203,000. You can deduct your full traditional IRA contribution if you are single or file as head of household and you are not covered by a retirement plan at work (or if you file jointly and neither you nor your spouse is covered by a retirement plan at work).

For more information about the income limits for deducting traditional IRA contributions in 2018 and 2019, see the IRS’s IRA Deduction Limits page.

Most Popular

Where's My Stimulus Check? Use the IRS's "Get My Payment" Portal to Get an Answer
Coronavirus and Your Money

Where's My Stimulus Check? Use the IRS's "Get My Payment" Portal to Get an Answer

The IRS updated its popular online tool so that you can track the status of your second stimulus check.
January 9, 2021
Biden Calls for $1,400 Payments as Part of $1.9 Trillion Relief Package
Coronavirus and Your Money

Biden Calls for $1,400 Payments as Part of $1.9 Trillion Relief Package

Under Biden's plan for a third stimulus check, the $600 second-round stimulus checks would be increased to $2,000.
January 14, 2021
6 Reasons Why Your Second Stimulus Check Might Be Delayed
Coronavirus and Your Money

6 Reasons Why Your Second Stimulus Check Might Be Delayed

The IRS started delivering second-round payments in December. If you're still waiting for your money, here's why your second stimulus check could be l…
January 9, 2021

Recommended

10 New Year’s Financial To Do’s (You’ll Feel Great When You Check Them Off)
retirement planning

10 New Year’s Financial To Do’s (You’ll Feel Great When You Check Them Off)

Once you run through this checklist, you’ll be in great shape for a prosperous and organized new year.
January 18, 2021
When Roth Conversions Are the Right Move – and When They Aren’t
Roth IRAs

When Roth Conversions Are the Right Move – and When They Aren’t

Converting a traditional IRA to a Roth IRA can be a smart tax- and estate-planning strategy for some people, but it can be a mistake for others.
January 15, 2021
Fund Your IRA, Cut Your Taxes
Tax Breaks

Fund Your IRA, Cut Your Taxes

There’s still time to make a 2020 IRA contribution and lower your tax bill.
January 13, 2021
10 Least Tax-Friendly States for Retirees
retirement

10 Least Tax-Friendly States for Retirees

When it comes to state and local taxes, retirees in these states are likely to pay more than retirees in other states.
January 12, 2021