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It's Official -- the IRA Contribution Limit Is Increasing for 2019

By Matthew Frankel, CFP® - Nov 2, 2018 at 6:11AM

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The IRS just announced the first IRA contribution limit increase in six years.

The IRA contribution limit is rising in 2019 for the first time in several years. This is great news for Americans who use individual retirement accounts, or IRAs, to save for their retirement. Here's a rundown of the new contribution limit as well as the updated 2019 IRA eligibility rules so you can plan your retirement saving strategy accordingly.

The 2019 IRA contribution limit

For 2019, the limit on contributions to an IRA is increasing by $500 to $6,000. This is the first increase to the annual contribution limit since 2013 -- IRA contribution limits are adjusted to keep pace with the cost of living, but they only increase in $500 increments, so they don't necessarily increase every year when there's inflation.

Jar of coins labeled retirement with stacks of coins nearby.

Image source: Getty Images.

The catch-up contribution allowed for individuals age 50 and older is still $1,000, for a total possible maximum of $7,000 contributed to an IRA for the 2019 tax year.

A couple of important notes:

  • The IRA contribution limit is a per-person limit, not a per-account one. In other words, if you have more than one IRA, your total contributions to all of your accounts cannot exceed the limit.
  • IRA contributions can be made anytime during the calendar year, or in the following calendar year up to the regular tax deadline. In other words, 2019 IRA contributions can be made anytime between January 1, 2019 and April 15, 2020.

Will you be able to contribute to an IRA in 2019?

IRAs are income-restricted forms of retirement savings, and the various income thresholds also adjust in response to inflation, so here's a look at the new income qualifications.

First, let's look at the traditional IRA. Technically speaking, anyone can contribute to a traditional IRA, but the ability to take advantage of the tax deduction for contributions is income-restricted for certain people.

Specifically, if you are eligible to participate in an employer's retirement plan, your ability to take the traditional IRA deduction is limited based on your income.

2019 Tax Filing Status

Income Limit for a Full Traditional IRA Deduction

Deduction Phases Out Entirely for Income Above




Married filing jointly



Married filing separately



Data source: IRS.

Here's how this works. If your adjusted gross income (AGI) is less than the full deduction limit, you can deduct 100% of your traditional IRA contributions, up to the annual limit. If your income falls between the two limits for your filing status, you can claim a partial deduction. And, if your income is greater than the phase-out limit, you can't deduct any traditional IRA contributions for 2019.

If you aren't eligible to participate in an employer's plan, your ability to contribute to an IRA is only restricted if your spouse has a retirement plan at work. In this case, the limit for a full deduction is $193,000, and the phase-out limit is $203,000.

On the other hand, Roth IRA contributions are income-restricted in the same manner for everyone, regardless of eligibility for an employer's retirement plan.

2019 Tax Filing Status

Income Limit for a Full Roth IRA Contribution

Roth Contribution Phases Out Entirely for Income Above

Single and head of household



Married filing jointly



Married filing separately



Data Source: IRS.

Having said that, there's a back-door method of contributing to a Roth IRA that you may be able to take advantage of if you earn too much to contribute directly. This basically involves contributing to a traditional IRA and immediately re-characterizing the account as a Roth, and it's perfectly legal, regardless of your income.

Will Americans take advantage?

Unlike with 401(k)s, where the annual contribution limit is much higher, the majority of active IRA investors contribute the maximum allowable amount to their accounts each year. So, it's fair to assume that lots of people will take advantage of the additional $500 contribution allowed in 2019.

This increase could make a big difference in the eventual retirement savings of Americans, especially younger investors. $500 compounded at an annualized 7% return rate would grow to about $3,800 in 30 years. If a saver were to max out their IRA contributions in subsequent years as well, the additional savings could have a big impact on their retirement nest egg.

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