Cost of living adjustments affecting dollar limitations for pension plans and other retirement-related items

Cost of living adjustments affecting dollar limitations for pension plans and other retirement-related items

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By Doug Nickerson, CPA, CGFM, CFE, CIA, CCA | Business Assurance & Advisory Services Partner

This information has been updated for 2020. Learn about the new limits on our most recent blog, 2020 Cost of Living Adjustments for Pension Plans

On November 1, 2018, the Internal Revenue Service (IRS) announced cost of living adjustments affecting dollar limitations for pension plans and other retirement-related items for tax year 2019. The IRS issued technical guidance detailing these items in Notice 2018-83.

Highlights of the significant changes for 2019 as compared to 2018 limits are as follows:

2019 2018
Employee Elective Deferral Limits-401(k), 403(b) & 457 $19,000 $18,500
Contribution Limits – IRAs $6,000 $5,500
Defined Contribution Maximum $56,000 $55,000
Annual Compensation Maximum $280,000 $275,000
Highly Compensated Employee $125,000 $120,000
Catch-Up Contributions Limit – 401(k), 403(b) & 457 $6,000 $6,000
Catch-Up Contributions Limit – IRAs $1,000 $1,000
Key Employee $180,000 $175,000
Defined Benefit Maximum $225,000 $220,000
Health Savings Accounts:
  • Individual
$3,500 $3,450
  • Family
$7,000 $6,900
  • Catch-up Contribution (age 55 and older)
$1,000 $1,000

Social Security Program Annual Changes

Additionally, in October 2018 the Social Security Administration (SSA) announced its annual changes to the Social Security program effective January 1, 2019.  A significant change is the increase of the taxable wage base to $132,900 for 2019.  The tax rate will remain the same at 6.2%.

Questions on the changes? Contact your Keiter representative or Email | Call: 804.747.0000


The information contained within this article is provided for informational purposes only and is current as of the date published. Online readers are advised not to act upon this information without seeking the service of a professional accountant, as this article is not a substitute for obtaining accounting, tax, or financial advice from a professional accountant.


About the Author

Doug shares his real estate and construction accounting insights with his clients to help them achieve their financial goals. He is a member of Keiter’s Real Estate and Construction team. Doug has over 18 years of experience in corporate accounting and public accounting providing audit and consulting services. Read more of Doug’s insights on our blog.

More Insights from Doug K. Nickerson, CPA, CGFM, CFE, CIA, CCA

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