Retirement By the Numbers: Employer Plans, IRAs and the Saver’s Credit

2019 Whole Ball Of Tax

Saving Opportunities Increase for Some Retirement Plans for 2019

Both IRA contribution levels and contribution limits to employer-sponsored programs are subject to cost of living adjustments (COLAs). IRA contribution levels increased from 2018 to 2019. The contribution levels for 401(k)s and other employer-sponsored programs ticked up $500 for 2019.

The allowable adjusted gross income (AGI) parameters for IRAs did increased for 2019. Income thresholds for 2019 also increased under the Retirement Savings Contributions Credit, commonly known as the Saver’s Credit, which is a nonrefundable tax credit that allows lower- and middle-income retirement plan participants to use elective contributions to reduce their federal income tax.

Employer-sponsored Programs
Retirement Vehicle Maximum 2019
Employee Contribution*
Catch-up Contributions
401(k), 457 and 403(b) plans $19,000 — pre-tax dollars
(up $500 from 2018)
(unchanged from 2018)
SIMPLE plans $13,000 — pre-tax dollars
(up to $500 from 2018)
(unchanged from 2018)
(Salary Reduction SEP)
$19,000 — pre-tax dollars
(up $500 from 2018)
(unchanged from 2018)

Retirement Vehicle 2019 Maximum Contribution Limits* Catch-up Contributions Adjusted Gross
Income (AGI) Restrictions
Traditional Deductible IRA $6,000
(up $500 from 2018)
(same for 2018)

For active participants in employer provided plan:

Single filers: under $64,000 phasing out completely at $74,000 (under $63,000 phasing out completely at $73,000 for 2018)

Married filing jointly: under $103,000 phasing out completely at $123,000 (under $101,000 phasing out completely at $121,000 for 2018)

Traditional Nondeductible IRA $6,000
(up $500 from 2018)
(same for 2018)
Roth IRA Nondeductible $6,000
(up $500 from 2018)
(same for 2018)

Single filers: under $122,000 phasing out completely at $137,000 (under $120,000 phasing out completely at $135,000 for 2018)

Married filing jointly: under $193,000 phasing out completely at $203,000 (under $189,000 phasing out completely at $199,000 for 2018)

*Subject to COLAs.

**SARSEPs must have been established prior to January 1, 1997. The maximum contribution and catch-up amounts are the same as for 401(k), 457 and 403(b) plans.

***Individuals have generally until the tax filing deadline (April 15, 2019 to make contributions to their IRAs for 2018).

Retirement Savings Contributions Credit****
Retirement Vehicle 2018 Maximum Credit Adjusted Gross
Income (AGI) Restrictions
IRAs, Roth IRAs, SIMPLE Plans, 401(k)s and other qualified retirement plans

$1,000 for single filers

$2,000 for joint filers

Single filers: $32,000 or less ($32,500 for 2018)

Head of household filers: $48,000 or less ($47,250 for 2018)

Married filing jointly: $64,000 or less ($63,000 for 2018)

****Depending on AGI, the Retirement Savings Contribution Credit, commonly referred to as the Saver’s Credit, provides a credit ranging from 10% to 50% with lower income taxpayers being eligible for a higher credit. For example, a married taxpayer filing jointly with an AGI of less than $38,000 making a $2,000 retirement plan contribution in 2018 could be eligible for a 50% credit, or $1,000. By contrast, if that same taxpayer had an AGI between $38,000 and $40,999, would be eligible for a 20% credit, or $400; an AGI between $41,000 and $62,999 would make that same taxpayer eligible for a 10% credit, or $200.

SOURCE: Wolters Kluwer, 2018
Permission for use granted.

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