2019 is the perfect time to boost your retirement plan since the IRS has announced new plan limits. These changes include increases for the 401(k), 403(b) and most government plans. In addition, it will produce benefits for many traditional pension plans and IRAs.  If you are the owner of a small business, it's a good time to look at your employee retirement plan.

Changes for 2019

Next year, the IRS is allowing you to put away an extra $500 in your 401(k) and 403(b), raising the amount from $18,500 in 2018 to $19,000 in 2019. This increase applies to most government plans as well. IRA investors will finally be allowed to increase their contribution, with the limit changing from $5500 with a $1000 catch-up contribution, for those 50 and over, to $6000 with a $1000 catch-up.

If you belong to a traditional pension plan at work, you will also benefit from the new limits. The maximum annual benefit amount has been raised from $220,000 to $225,000. Your employer will be allowed to contribute up to $56,000, a change from 2018's $55,000 limit.

Maximizing Your Retirement Plan Funding

In addition to upping your contribution, you can take some other steps to maximize your retirement plan.

1. Experts recommend carefully reading your account statements so that you know exactly how much you are being charged in management fees.
2. Keep an eye out for suspicious account activity. While you know to watch your bank accounts carefully, you may not realize that retirement funds are favorite targets of hackers as well.
3. Ask your financial adviser about the Roth 401(k). Unlike the Roth IRA, the 401(k) does not have any income limits, which means it's another excellent retirement tool for those in a higher income bracket than the average person.

Choosing a Retirement Plan for Your Business

When choosing a retirement plan for your business, you have many factors to consider. Some small business owners fear that they cannot afford to offer this benefit to their employees, but you have more options than you may realize.

For instance, a simplified employee pension (SEP) lets you contribute up to 25% of each employee's wages. Employees do not contribute to the plan and there are no filing requirements for you. The SEP is not expensive to set up or operate, either. Finally, you can adjust the amount you contribute depending on the cash flow status of your business. If you hit a downturn, you can lessen your contribution.

You may also consider a Savings Incentive Match Plan for Employees (SIMPLE IRA plan) or a 401(k). Your financial adviser can help you choose an affordable plan that will benefit your employees and possibly give you welcome tax incentives. Your employees will also be more likely to stick around for the long term when they are more secure with their retirement.

In summary, the IRS has made changes for 2019 that allow you to boost your retirement plan contributions. As you are well aware, the cost of a long and happy retirement continues to rise, so making changes now will benefit you later. Meet with your financial planner before the beginning of the year and modify your approach to get the biggest benefit in 2019.