Retirement plan contribution limits are indexed for inflation, but with inflation remaining low, most of the limits remain unchanged.
Good News for Taxpayers…
But one piece of good news for taxpayers who’re already maxing out their contributions. The 401(k) limit has gone up by $500. The only other limit that has increased from the 2017 level is for contributions to defined contribution plans It has gone up by $1,000.
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It’s Not Too Late
If you’re not already maxing out your contributions to other plans, you still have an opportunity to save more. And if you turn age 50, you can begin to take advantage of catch-up contributions.
Higher-income taxpayers should also be pleased. Some limits on retirement plan contributions that had been discussed as part of tax reform didn’t make the final legislation.
However, keep in mind that there are still additional factors that may affect how much you’re allowed to contribute. (or how much your employer can contribute on your behalf) For example, income-based limits may reduce or eliminate your ability to make Roth IRA contributions. Also to make deductible traditional IRA contributions.
If you have questions about how much you can contribute to tax-advantaged 401(k) retirement plans, check with us.