The IRS has released its annual update for the cost-of-living adjustments for 2019. Consistent with last year, elective deferral limits for 401(k) and 403(b) plans increased another $500 from $18,500 to $19,000, the annual compensation limit increased $5,000 from $275,000 to $280,000, the defined contribution plan limit received another $1,000 bump, up to $56,000, and the defined benefit plan limit was again increased $5,000 to $225,000. The Social Security taxable wage base was increased again, but unlike last year (increase of $1,200), this time there will be a larger increase of $4,500 for 2019 to $132,900.

Additional changes were also made this year that increased the SIMPLE IRAs and 401(k) elective deferral limit by $500 from $12,500 to $13,000, the definition of highly compensation employee by $5,000 from $120,000 to $125,000, and changed the definition of key employee in a top heavy plan from an officer with an annual compensation greater than $175,000 to an officer with an annual compensation greater than $180,000.

The new amounts as well as the 2018 amounts are listed in the chart below.

2018

2019

ELECTIVE DEFERRAL ANNUAL LIMITS
401(k), 403(b) and SEPs $18,500 $19,000
457 Plans $18,500 $19,000
SIMPLE IRAs and 401(k)s $12,500 $13,000
CATCH-UP CONTRIBUTIONS
401(k), 403(b) and SEPs $6,000 $6,000
SIMPLE IRAs and 401(k)s $3,000 $3,000
COMPENSATION LIMIT $275,000 $280,000
DEFINED BENEFIT PLAN LIMIT $220,000 $225,000
DEFINED CONTRIBUTION PLAN LIMIT $55,000 $56,000
HIGHLY COMPENSATED EMPLOYEE $120,000 $125,000
KEY EMPLOYEE
Officers $175,000 $180,000
1% Owner $150,000 $150,000
SOCIAL SECURITY TAXABLE WAGE BASE $128,400 $132,900