Financial WellnessRetirement

IRS Releases New 2020 Annual Limits on Retirement Contributions

 




 

 

 

 

 

The IRS has announced its 2020 inflation-adjusted, annual contribution limits on retirement-related accounts and funds for self-employed and workers participating in employer-sponsored plans.

Among the most notable changes 2020 are:

  • 401(k) contribution limits are up; traditional IRA contribution limits stay the same; almost all the other numbers are up.
  • 401(k) contributions and similar retirement plans offered in the workplace increase to $19,500 in 2020 from $19,000 in 2019.
  • If you are 50-years of age or older in 2020, the 401(k) catch-up contribution increases to $6,500 for workplace plans in 2020 from $6,000 in 2019. However, Individual Retirement Account (IRA) contributions remain the same ta $6000, with a $1,000 catch-up limit if you are older than 50.
  • The overall defined contribution plan limit increases to $57,000 in 2020, from $56,000.
  • The overall defined contribution plan limit has been raised to $57,000 in 202, from $56,000. This includes both employer and employee contributions.
  • The annual elective deferral limit for 401(k) plan employee contributions increased from $19,000 to $19,500 in 2020.

For more specifics on all the retirement-related contribution changes for 2020, including those for self-employed individuals, see this PDF (below) prepared by the College for Financial Planning.

2020 CFFP Annual Limits

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Chuck Epstein

Chuck Epstein

Chuck Epstein has managed marketing communications and public relations departments for major global financial institutions and participated in the launch of industry-changing financial products. He also has written by-lined articles for over 50 publications, five books and served as editor and publisher of nation’s first newsletter on the topic of using the PC for personal investing and trading. (“Investing Online, 1994-1999). He also is a marketing consultant, writer and speaker on topics related to investor protection and opportunities in the very dynamic cannabis industry.

He has held senior-level marketing, PR and communications positions at the New York Futures Exchange, Chicago Mercantile Exchange, Lind-Waldock, Zacks Investment Research, Russell Investments and Principal Financial.

He has won national awards from the Mutual Fund Education Alliance (MFEA) and his web site, www.mutualfundreform.com, was named best small blog in 2009 by the Society of American Business Editors and Writers (SABEW).

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