On October 19, the The Internal Revenue Service announced new cost of living adjustments for some retirement plans. Most notably, perhaps, is the increase in the 401(k) annual contribution limit from $18,000 to $18,500 for savers under age 50. The catch-up amount for savers over 50 remained at $6,000, making a total limit for those savers of $24,500.
As of this writing, it appears that changes to 401(k) contributions are not off the table in Congress’s budget discussions, so these revised contribution limits may be subject to change—drastic change by some accounts.
The ability to contribute to a Roth IRA is dependent upon income. At a certain level, one’s ability is limited (the first figure in each pair, below), and at another level (the second figure), it is eliminated. The income phase-out range for taxpayers wishing to contribute to a Roth IRA was shifted up to $120,000 to $135,000 (from $118,000 to $133,000) for singles; for married couples filing jointly, the range is now $189,000 to $199,000 (from $186,000 to $196,000.)
The limit on annual IRA contributions was not changed. It remains $5,500, with a $1,000 catch-up available for savers over age 50.
You can see the IRS news release by clicking here.