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.