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Retirement Contribution limits going up in 2019
Old 11-02-2018, 05:27 PM   #1
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Retirement Contribution limits going up in 2019

IRS announced new retirement contribution limits for 2019.

401k & 403b - $19,000 up from $18,500
IRA & ROTH - $6000 up from $5,500

Over 50 catch-up contributions remain at $1000

https://www.marketwatch.com/story/yo...019-2018-11-01


https://www.irs.gov/newsroom/401k-co...reases-to-6000
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Old 11-02-2018, 05:35 PM   #2
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Originally Posted by FIREd_2015 View Post
401k & 403b - $19,000 up from $18,500
IRA & ROTH - $6000 up from $5,500[/URL]
Whooo hoo! I'm planning to work 3 months next year, so that I can make the maximum contribution just before retiring without incurring taxes!
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Old 11-02-2018, 06:18 PM   #3
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Old 11-02-2018, 06:53 PM   #4
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Meaningless to most people. Only matters to high income people. I would have to save over 50% of my income to max out both. I am right around the average US wage. I would have to live on around $12K/yr net to save the max.
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Old 11-02-2018, 09:01 PM   #5
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Thank you! Good info.
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Old 11-02-2018, 09:31 PM   #6
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When I was working this was always my favorite news of the year. Save! Save! Save! will get you there.
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Old 11-02-2018, 10:25 PM   #7
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Meaningless to most people. Only matters to high income people. I would have to save over 50% of my income to max out both. I am right around the average US wage. I would have to live on around $12K/yr net to save the max.
The IRA limits matter quite a bit to anyone with earned income to save for
retirement. 21% of workers don't have access to a 401K at all. A lot of others
work for an employer that doesn't match and has high fee *crappy* plans or are
self employed. Everyone with earned income has access to an IRA and for a significant
percentage an IRA is the best first destination for savings. The raise in the IRA
limit is pretty important.
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Old 11-02-2018, 10:48 PM   #8
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Originally Posted by aaronc879 View Post
Meaningless to most people. Only matters to high income people. I would have to save over 50% of my income to max out both. I am right around the average US wage. I would have to live on around $12K/yr net to save the max.
Or you could do what I'll be doing, which is using monies from my savings to cover my maxing my 401k pre-tax, catch up, and about $30k in after tax, which I'll then move via in-service rollover to Roth. Given how little I have in Roth, and my desire to have a tax-free pool to draw from as RMDs get big, I figure this is a decent path.

The down side is that my monthly paychecks for a six-figure job will be about $1200 during the after tax maxing!
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Old 11-02-2018, 11:29 PM   #9
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Or you could do what I'll be doing, which is using monies from my savings to cover my maxing my 401k pre-tax, catch up, and about $30k in after tax, which I'll then move via in-service rollover to Roth. Given how little I have in Roth, and my desire to have a tax-free pool to draw from as RMDs get big, I figure this is a decent path.

The down side is that my monthly paychecks for a six-figure job will be about $1200 during the after tax maxing!
It was quite an epiphany 4 years ago when I figured out what the buzz online
was about the "mega-backdoor Roth" and that my employer's plan allowed the
moves required to accomplish it. Since then I've had several discussions with
co-workers explaining how you don't necessarily have to be able to fund it from
paychecks if you currently have taxable money saved. You can use monthly
paycheck deductions and make up the shortfall from savings as a round about
way to shuttle taxable savings into Roth. IOW, money is fungible . I'm not
the best at explaining even slightly complicated topics though and only a couple
have "gotten it". The rest look at me like I'm speaking Greek.
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Old 11-02-2018, 11:33 PM   #10
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Originally Posted by FIREd_2015 View Post
IRS announced new retirement contribution limits for 2019. IRA & ROTH - $6000 up from $5,500
Awesome, that's not much but every little bit helps.

The big question I always have is WHY are contributions limited at all? The government gets their money either way, so why limit what people can contribute?
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Old 11-03-2018, 04:03 AM   #11
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Quote:
Originally Posted by FIREd_2015 View Post
IRS announced new retirement contribution limits for 2019.

401k & 403b - $19,000 up from $18,500
IRA & ROTH - $6000 up from $5,500

Over 50 catch-up contributions remain at $1000

https://www.marketwatch.com/story/yo...019-2018-11-01


https://www.irs.gov/newsroom/401k-co...reases-to-6000
Attention ACA tax credit people: IRA's reduce your MAGI. This extra contribution might just make a difference.
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Old 11-03-2018, 04:07 AM   #12
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Meaningless to most people. Only matters to high income people.
Not always....since it reduces MAGI, IRA contributions can be useful to those (lower earners) who have a year of unexpected higher earnings and need to reduce income to keep the tax credits.
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