2019 IRA, 401k, and Roth IRA contribution limits – Roth IRA eligibility, IRA tax deductions, and more!

by Begin To Invest on January 2, 2019

Happy New Year!

With a new year comes new IRS rules. Here’s what has changed for 2019 in regards to how much you can contribute to your IRA, 401k, and Roth IRA – Along with various income restrictions to be eligible.

2019 IRA and ROTH IRA Contribution Limits

For 2019, your allowed annual contribution to IRAs, and Roth IRAs, has increased $500 from 2018!

You are now able to contribute up to $6,000 to a traditional IRA, or a Roth IRA. If you are age 50 or older, that jumps to $7,000.

And remember, the $6,000 or $7,000 limit is the combined contribution for all IRAs and Roth IRAs. You can not contribute $6,000 to a traditional IRA and $6,000 to a Roth. You may do $3,000 to a traditional and $3,000 to a Roth, but in total contributions can not exceed $6,000 or $7,000.

Monthly Savings to Maximize IRA and Roth IRAs

For those look to maximize your IRA and Roth IRA contributions in 2019, how much will you need to save each month, or each paycheck?

For those under age 50 with a $6,000 annual IRA contribution limit:

$500 per month, or
$250 per paycheck if paid twice per monthly, or
$230.76 per paycheck if paid bi-weekly (assumes 26 pay periods in 2019)

For those age 50 or over with a $7,000 annual IRA contribution limit:

$583.33 per month, or
$291.66 per paycheck if paid twice per monthly, or
$269.23 per paycheck if paid bi-weekly (assumes 26 pay periods in 2019)

2019 401k Contribution Limits

Like IRA contribution limits, the amount you are able to save in your 401k has been increased as well!

This year you are allowed an annual contribution of up to $19,000 in your 401k if you are under age 50. This is a $500 increase from 2018.

If you are age 50 or older, you are able to contribute and extra $6,000, for a total of $25,000.

For those under age 50 with a $19,000 401k annual contribution limit, that means:

$1,583.33 per month, or
$791.66 per paycheck if paid twice per month, or
$730.76 per paycheck if paid bi-weekly (assumes 26 pay periods in 2019)

For those age 50 or over with a $25,000 annual 401k contribution limit:

$2083.33 per month, or
$1,041.66 per paycheck if paid twice per month, or
$961.53 per paycheck if paid bi-weekly (assumes 26 pay periods in 2019)

2019 IRA Deduction Income Limits

Those with income above a certain threshold and have a qualified retirement plan at their place of employment (a 401k, 403b, most 457s, TSP, etc.) are not allowed to deduct their annual IRA contributions.

For 2019, that limit is:

For single filers:

Deductions begin to phase out at $64,000 in income.
Deductions are not allowed with income above $74,000.

For married filers:

Deductions begin to phase out at $103,000 in income.
Deductions are not allowed with income above $123,000.

For an IRA contributor who is not covered by a qualified workplace retirement plan, but their spouse is:

Deductions begin to phase out at $193,000 in income.
Deductions are not allowed with income above $203,000.

2019 Roth IRA Income Limits

In order to be able to contribute to a Roth IRA, you must be under a certain level of income. For 2019 the income cap for Roth IRA eligibility is:

For single filers:

Eligibility is limited for those with income greater than $122,000.
Eligibility is eliminated for those with income above $137,000.

For married filers:

Eligibility is limited for those with income greater than $193,000.
Eligibility is eliminated for those with income above $203,000.

2019 Income Limits for Saver’s Credit Eligibility

Lastly for 2019, the income limit to qualify for the Saver’s Credit (also known as the Retirement Savings Contributions Credit) has changed in 2019.

The Saver’s Credit allows those with low income to take an increased tax credit for qualified retirement account (401k, IRA, and now in 2019 also ABLE accounts) contributions. Savers are given a credit of a certain percentage of their contribution based on their income. For example, if you qualify for a 50% credit and you contribute $3,000 to an IRA, you will get an additional tax credit of $1,500. A great deal for those who are able to pinch pennies or reduce their taxable incomes to qualify!

For single filers: