By Sarah Ruef-Lindquist, JD, CTFA
The elimination of most pension plans, also known as “defined benefit” plans over the past 40 years has meant most working people must exercise some discipline to save for their own retirement and/or participate in plans like the 401(k), often an employer-sponsored plan, also known as defined contribution plans.
According to the US Department of Labor, between 1975 and 2014, the number of defined benefit (more commonly called pension ) plans in the private sector fell by 57% while the number of defined contribution plans increased by 208%. Limitations on what people can contribute annually to those plans has been static for five years. The amount of money people could contribute to their retirement plans with pre-tax dollars as of 2018 has not increased since 2013. However, the IRS has recently announced new limits on retirement plan contributions beginning in 2019.
If you haven’t in past years, make 2019 the year you max out your contributions limits, saving more than before, and plan for your retirement future.
We will review the changes by types of plans:
|2019 Retirement Plan||Types Amount of 2019 Limit||Age 50+ catch-up|
|SIMPLE IRA||$ 13,000||$3,000|
|401(k), 403(b) and 457 Plans||$ 19,000||$6,000|
|Defined Benefit Plan 415(b)(1)(A)||$225,000|
|Defined Contrib. 415(c)(1)(A)||$ 56,000|
|ROTH PHASE-OUT Single
ROTH PHASE-OUT Married Filing Jointly
$120,000 – $137,000
$193,000 – $203,000