As we finish up the 2019 calendar year and head into 2020, it’s important for you to remember that you can still contribute funds into your retirement accounts to grow money tax-deferred in a Traditional IRA or 401(k), or tax-free within a Roth IRA or Roth 401(k).
- In 2019 you can contribute up to $6,000 into your IRA or Roth IRA. If over the age of 50, you can contribute up to $7,000 for the year.
- In 2019 you can contribute up to $19,000 in your employer plan (often a 401(k), 403(b), or 457 plan). If over the age of 50, you can contribute an additional $6,000 for a total of $25,000. It is important to remember this total applies only to what you are contributing and does not include what your employer is contributing or matching.
- In 2020 the contribution maximum for IRA or Roth IRA accounts will stay the same at $6,000 maximum, or up to $7,000 if over the age of 50.
- In 2020 the contribution maximum for an employer plan will increase from $19,000 to $19,500, or if over the age of 50, you will be able to contribute an additional $6,500 for a total of $26,000.
Remember, you can contribute to your IRA for the 2019 tax year through April 15, 2020, or when you file your taxes.
The IRS has also increased the phaseout of adjustable gross income taxpayers can earn to take advantage of tax-deductible IRA contributions or tax-free Roth IRA contributions. Reach out to us if you would like to learn more about the specifics of these limits.