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Managing Your Church Blog, November, 2018
Your IRA and 401(k) Contribution Limits Just Went up for 2019
The IRS issued new guidance in November for cost-of-living increases.
Your IRA and 401(k) Contribution Limits Just Went up for 2019

Recently the Internal Revenue Service announced a cost-of-living adjustment to the annual contribution limits for retirement vehicles for the upcoming 2019 tax year. The plans and accounts affected include Individual Retirement Arrangements (IRAs) as well as 401(k), 403(b), and many 457 plans.

The current contribution limit for 401(k), 403(b), and 457 plans is $18,500 per year. Now, with the cost-of-living adjustment for 2019, that limit will be increased to $19,000.

IRAs are available to many taxpayers but are dependent on income ranges that determine eligibility. Those income ranges have changed for 2019, all increasing, reflecting the economic inflation of the past several years. For those who qualify to make annual contributions to an IRA (which would be most church employees), the IRA limit has increased from $5,500 to $6,000 for the coming tax year.

Not all limitations have increased, though. It’s important to note that catch-up contributions for employees aged 50 or older for retirement plans like a 401(k) or 403(b) remains at $6,000. The catch-up limit for IRAs for those 50 and older also hasn’t changed at just $1,000.

Still, these changes are likely welcome news for individuals who regularly contribute to their own retirement or who are in their 50s and 60s when many Americans save more earnestly—and can afford to.

If you’re one of the many church employees nationwide who hasn’t started saving for retirement yet, the time to start is now. Don’t wait! Waiting takes away your greatest wealth builder: compound interest over a long period of time.

And if you need to check up on your projected retirement savings (a general rule of thumb is to have 25 times your needed annual income saved), let our retirement calculator help.

If you need to make sure you’re setting fair pay and your church is paying enough for an employee to save something for retirement, get an objective ChurchSalary report.

For more detailed information about the new limits, income ranges, and more, including Notice 2018-83 explaining these changes, visit the IRS’s website (

Samuel Ogles is associate editor and special project manager for Church Law & Tax.