The Internal Revenue Service has announced next year’s contribution limits for the Thrift Savings Plan and for Individual Retirement Accounts. Good news for federal employees saving for their future: you will be able to contribute more to each.
2019 TSP Contribution Limits
The annual contribution limit in 2019 for the TSP will be $19,000. That is up from $18,500 in 2018, a 2.7% increase. This limit also applies to 401(k), 403(b), and most 457 plans.
The catch-up contribution limit for employees aged 50 and over who participate in the TSP remains unchanged at $6,000. This also applies to 401(k), 403(b), and most 457 plans.
2019 IRA Contribution Limits
The contribution limit is also rising for IRAs. In 2019, it will be $6,000, up from $5,500 in 2018, an increase of 9%. This limit was last increased in 2013, so it’s a welcome change for savers.
The additional catch-up contribution limit on IRAs for individuals aged 50 and over is not subject to an annual cost-of-living adjustment and remains $1,000.
IRA Income Limits
The income ranges for determining eligibility to make deductible contributions to traditional and Roth IRAs all increased for 2019.
Taxpayers can deduct contributions to a traditional IRA if they meet certain conditions. If during the year either the taxpayer or his/her spouse was covered by a retirement plan at work, the deduction may be reduced, or phased out, until it is eliminated, depending on filing status and income. (If neither the taxpayer nor his/her spouse is covered by a retirement plan at work, the phase-outs of the deduction do not apply.)
The phase-out ranges for 2019 are as follows:
- For single taxpayers covered by a workplace retirement plan, the phase-out range is $64,000 to $74,000, up from $63,000 to $73,000.
- For married couples filing jointly, where the spouse making the IRA contribution is covered by a workplace retirement plan, the phase-out range is $103,000 to $123,000, up from $101,000 to $121,000.
- For an IRA contributor who is not covered by a workplace retirement plan and is married to someone who is covered, the deduction is phased out if the couple’s income is between $193,000 and $203,000, up from $189,000 and $199,000.
- For a married individual filing a separate return who is covered by a workplace retirement plan, the phase-out range is not subject to an annual cost-of-living adjustment and remains $0 to $10,000.
The income phase-out range for taxpayers making contributions to a Roth IRA is $122,000 to $137,000 for singles and heads of household, up from $120,000 to $135,000.
For married couples filing jointly, the income phase-out range is $193,000 to $203,000, up from $189,000 to $199,000. The phase-out range for a married individual filing a separate return who makes contributions to a Roth IRA is not subject to an annual cost-of-living adjustment and remains $0 to $10,000.
The income limit for the Saver’s Credit (also known as the Retirement Savings Contributions Credit) for low- and moderate-income workers is $64,000 for married couples filing jointly, up from $63,000; $48,000 for heads of household, up from $47,250; and $32,000 for singles and married individuals filing separately, up from $31,500.
Additional information and details are available in the document below from the IRS, Notice 2018-83.