By Sarah Brenner, JD
IRA Analyst

Good news for retirement savers! The IRA contribution limit, which was $5,500 for 2018, will rise to $6,000 for 2019. If you are over age 50 in 2019, you will be able to save even more. The limit for those who are age 50 or over in 2019 will be $7,000, up from $6,500 for 2018.

IRS Increases IRA Limit

The increase in the IRA contribution limit is the result of annual cost-of-living adjustments (COLAs) to retirement account limits recently released by the IRS. This is the first time since 2013 that the IRA contribution limit has been affected. For the past five years it has been $5,500 for those under age 50 and $6,500 for those age 50 or over during the year. The annual COLAs for the IRA contribution limits were first put in place by the Economic Growth and Tax Reconciliation Relief Act of 2001 (EGTRRA). Before EGTRRA, the limit was $2,000 and had been so since 1982.

Rules to Remember

Be careful as you plan your 2019 IRA contribution. Not everyone is eligible to contribute the full amount. You must have earned income on which to base your IRA contribution. Not all taxable income counts as earned income. For example, investment income and social security income will not work. Also, you must be sure you are otherwise eligible. For example, if you will be age 70 ½ or older you may not make a traditional IRA contribution. There are also income limits. You may make too much money to contribute to a Roth IRA or your ability to deduct a traditional IRA contribution may be limited (i.e., the phase-out range).

Keep in mind as well that the new higher limit applies to contributions made for 2019, not contributions made in 2019. If you are planning to make your contribution for 2018 as a prior year contribution in 2019, you will still be limited to the 2018 limit of $5,500 ($6,500 if you are over age 50).

Other Limits Increased

The IRS has also raised some other retirement account limits. For example, the limit for salary deferrals to 401(k) plans has been raised. For 2019, you can defer $19,000 to your 401(k) ($25,000 if you are age 50 or older). This is up from the 2018 limit of $18,500 ($24,500 if you are age 50 or older). Other limits that have been increased include the income limits for eligibility to make a Roth IRA contribution and the income limits for deductibility of traditional IRA contributions for active participants. More information on the 2019 retirement account limits can be found on the IRS website at