Happy New Year! Now that 2018 is over it’s time to ring in the new year with new tax law changes. So if you woke up January 1st asking what’s changed then you’ve come to the right place. One big question that I hear all year round is “How much can I put into my 401(k)?” And if you asked me in December the number would’ve been different than it is today so read on for the answer…
Great news! As of January 1st, 2019 the IRS maximum employee 401(k) contribution has increased from $18,500/yr. to $19K/yr. A catch up contribution of $6K/yr. is allowed for individuals that are age 50 and older. Please note that this new limit applies to both 401(k) and Roth 401(k) contributions so the total is $19K/yr. between both types of contributions.
Total annual additions into a 401(k) including employee contributions (not including catch-up contributions), forfeitures, and employer matching and non-elective contributions must be the lessor of 100% of the employee’s compensation or $56K/yr. This has also increased from $55K in 2018.
So if you maxed out your 401(k) in 2018 you should consider doubling check your 2019 contributions to see if you need to make adjustments! And CLICK HERE to see if we can help you to figure out how this fits into your financial plan.
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