Retirement

Time to review 403(b) and IRA contribution limits

DATE | 01/03/19
2
Min
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Are you contributing as much as you can toward your retirement?

The contribution limit for the 403(b) has increased from $18,500 to $19,000 in 2019. The limit on annual contributions to an IRA, which last increased in 2013, has increased from $5,500 to $6,000. If you’re not maximizing your contributions, you may wish to re-evaluate the amount you’re putting toward retirement. Not only do you lower your taxable income, you ensure that you’re doing everything you can to reach your retirement goals.

Elective 403(b) Contribution Limits

Calendar yearSalary Reduction Contribution Limit15 Years of Service Catch-UpAge 50 and Over Catch-UpPossible maximum
2019$19,000$3,000$6,000$28,000
2018$18,500$3,000$6,000$27,500

For your 403(b) account, some employers only allow changes at the start of the school year and then again in January. Others allow more frequent changes. Both you and your employer will need to sign a salary reduction agreement.

Some districts may allow Roth 403(b) contributions. Your Roth contributions and your pre-tax contributions combined must not exceed the $19,000 limit.

IRA (Roth and Traditional) Contribution Limits

Calendar yearUnder age 50Age 50 or older
2019$6,000$7,000
2018$5,500$6,500

You may contribute to both a Roth and Traditional IRA, but your combined contributions must not exceed the annual limits.

If you make automatic IRA contributions using SmartPlan or through payroll deduction (available in districts offering Trust Advantage™), your contributions do not adjust automatically to meet the new limits. To make adjustments, call 1-800-279-4030 or print out an IRA Contribution Form.

If maxing out contributions is not realistic for you right now, remember: With compound interest, even a small amount invested today can grow to a large sum by retirement.

NOTE: Because the maximum Roth IRA contribution may be reduced depending on MAGI (Modified Adjusted Gross Income), some high-income taxpayers may not be able to make Roth IRA cotnributions; however, they could make Traditional IRA contributions.