It is December and we are nearing the end of another year. Do you know what that means?? It means new contribution limits for our tax-advantaged accounts!! Just today I sent the bookkeeper at my job an email asking her to up my 2019 contribution limits for my two pre-tax accounts. Now is the time to be planning our 2019 contributions.
Each year the IRS may increase the contribution limits on tax-advantaged accounts so it’s worthy to be aware of them. Especially if you are maxing out your contributions each year.
Employer-Sponsored Retirement Plans
Here are the new 2019 limits for the different type of employer-sponsored retirement accounts:
I have access to a Simple IRA through my employer. I am now only 4 years from turning 50…the catch-up contributions is about the only thing exciting about that. 😉
Individual Retirement Accounts
This the limit for an IRA as well as a Roth IRA. In case you are wondering, I’m maxing out my Roth IRA for 2018 as well as 2019.
Health Savings Accounts
I’m also able to contribute to an HSA account due to being on an HSA qualified health plan. Furthermore, I invest these monies in mutual funds.
If you are not an HSA qualified plan, you can still reap the tax savings of contributing to a Flexible Spending Account. Check out this post I wrote for Fred over at Money with a Purpose on things to consider during open enrollment. I lay out the differences between HSAs and FSAs.
Additionally, if you have an FSA, you can put in money for dependent care expenses.
With all of the above-mentioned accounts, you cannot contribute more than the limits. Moreover, you don’t have to contribute the maximum; however, you receive the greatest tax savings if you do.
I apologize for the short post today but I’m in my busy season at the office. Although, I did want to get this quick article out to you so you can make your decisions about your 2019 contributions now.
I starting maxing out the following accounts in 2018 and will continue to do so for the foreseeable future:
- Simple IRA
- Roth IRA
Additionally, I have an after-tax brokerage account I am starting to contribute to.
If you are unable to max out your retirement accounts, don’t worry. I encourage you to contribute something and if you are able to, keep inching closer to maxing them out. That is what this is all about – getting a little bit better all the time.
Happy investing and happy tax savings!!