2020 contribution limits: What do they mean for me?

The IRS has announced contribution and benefit limits for 2020. Click here for details.

What do they mean for me?

Good news! The limits have increased across many areas so you can save more for your retirement.

• The contribution limit for employees who participate in 401(k), 403(b), and most 457 plans increased from $19,000 to $19,500.
• If you are over age 50, you are eligible for a catch-up contribution, which has increased from $6,000 to $6,500.
• There were no changes to the limit on annual contributions to IRAs, which remain at $6,000 and catch up contributions also remain at $1,000.

Other limits included in the IRS notice include the following:

	2020	2019	2018
RETIREMENT PLANS
Max Elective Deferrals: 401(k)/403(b) – 402(g)(1)	$19,500	$19,000	$18,500
Max Catch-up: 414(v)(2)(B)(i)	$6,500	$6,000	$6,000
457 Elected Deferrals: 457(e)(15)	$19,500	$19,000	$18,500
Max Defined Contribution: 415(c)(1)(A)	$57,000	$56,000	$55,000
Max Annual Compensation: 401(a)(17)/404(I)	$285,000	$280,000	$275,000
Annual Compensation Grandfathered Governmental Plans	$425,000	$415,000	$405,000
IRA: INDIVIDUAL RETIREMENT ACCOUNTS
Max Contributions: 219(b)(5)(A)	$6,000	$6,000	$5,500
Max Catch-up: 219(b)(5)(B)	$1,000	$1,000	$1,000
SEP: SIMPLIFIED EMPLOYEE PENSION PLANS
Minimum Compensation: 408(k)(2)(c)	$600	$600	$600
Max Compensation: 408(k)(3)(c)	$285,000	$280,000	$275,000
SIMPLE PLANS
Max Contributions: 408(p)(2)(E)	$13,500	$13,000	$12,500
Max Catch-up: 414(v)(2)(B)(ii)	$3,000	$3,000	$3,000
OTHER
Highly Compensated Threshold: 414(q)(1)(B)	$130,000	$125,000	$120,000
Defined Benefit Limits: 415(b)(1)(A)	$230,000	$225,000	$220,000
Key Employee Threshold: 416(i)(1)(A)(i)	$185,000	$180,000	$175,000
Social Security Taxable Wage Base	$137,700	$132,900	$128,400