Every year the Department of Treasury, which is an umbrella for the IRS, is required by federal law to determine whether or not to make cost-of-living adjustments to retirement contribution limits.

If the cost of living goes up, generally so do those limits. 2019 is the year of increase!

If you’re 49 years of age or younger, your 401(k), 403(b), the majority of 457 plans, and Thrift Savings Plans limits will jump to $19,000 from $18,500.

IRA contributions caps will be $6,000, up from $5,500.

What does that mean for people 50 and up, then? Folks in this age bracket are able to make catch-up contributions: additional investment amounts which allow people who had been subject to smaller income and contribution amounts over the years to “catch up” to the current cost of living. The same workplace plan limits as for the 49 and younger crowd (401(k), 403(b), most 457 plans, and Thrift Savings Plans) will stay at $6,000, which means the total amount this age group can sock away in 2019 is $25,000.

IRA catch-up contributions aren’t required to undergo the annual cost-of-living adjustment, which means the contribution limit in 2019 will stay at $1,000 and will max out at $7,000.

If all of this sounds like Greek to you or you’d like to know more about how to maximize your retirement savings, reach out to us today. We’re here to help clear up the financial fog for you!