How to maximize your retirement savings in 2019

|
retirement fund
Image Credit: Dreamstime
Advertisement

When you’re looking to save money for retirement, it’s helpful to know how much cash you’re allowed to stash in different investment vehicles. In this article, we’ll let let you know what you’re allowed to put where in order to take the most advantage of tax savings on the money you’re socking away.

Maximize your retirement contributions in 2019

2019 retirement savings limits: Table of contents

The maximum contribution limits for a variety of things like 401(k)s, Roth IRAs and more tend to go up over the years. Here’s how much you can save this year, broken down by category.

401(k) limits

A 401(k) offers you a tax break upfront through a payroll deduction today, but the money will be taxed down the road when you need it in retirement.

2019 limit $19,000*

* If your plan permits, you can make catch-contributions of $6,000 (for a total of $25,000) beginning at age 50.

RELATED: Beware of making this $300,000 mistake with your 401(k)

IRA limits

Individual retirement accounts also give you a tax break upfront, with taxes deferred until you need to pull the money out down the road.

2019 limit $6,000*

* Those who are over 50 or older can make a catch-up contribution of an additional $1,000, for a total of $7,000.

Roth IRA limits

Roth IRAs are different than traditional IRAs in their tax treatment. With a Roth, you contribute after-tax dollars today. But the money is not taxed again when you need it during retirement.

2019 limit $6,000*

* Those who are over 50 or older can make a catch-up contribution of an additional $1,000, for a total of $7,000.

RELATED: How to open a Roth IRA

Advertisement

403(b) limits

A 403(b) is a retirement plan for those who are employed by a public school system, hospital, home health service agency, health and welfare service agency or church.

2019 limit $19,000*

* Catch-up contributions can by made by those who have 15 years on the job or are 50+. Limits vary based on circumstance. See IRS.gov for complete details.

RELATED: 4 questions for teachers to ask about their 403(b) retirement plans

457 limits 

A 457 is a retirement plan for governmental and certain non-governmental employers in the United States.

2019 limit $19,000*

* Catch-up contributions can by made by those who have less than three years to normal retirement age left or are 50+. Limits vary based on circumstance. See IRS.gov for complete details.

SEP limits 

Simplified employee pension plans work like a traditional IRA or a 401(k), with a current year tax deduction, but withdrawals are taxed at retirement.

2019 limit $56,000

Final thought

Retirement is one of those things that you can’t leave for another day. The time to save is today. No one should leave saving for retirement until they’re 50 or 60 — or you risk not getting it done and having to work well past the age you want to work.

Plus, the earlier you save money, the more it has time to grow!

More personal finance stories on Clark.com:

Advertisement
  • Show Comments Hide Comments