IRS announces new retirement plan limitations for 2020

On November 6, 2019, the IRS announced cost of living adjustments affecting dollar limitations for pension plans and other retirement-related items for the 2020 tax year. Changes to the limits are based on the Social Security cost-of-living increases. Similar to last year, most of the applicable pension and retirement limitations will increase for the 2020 tax year.  

Below are the new 2020 plan limitations:

  2020  2019
401(k),403(b) and 457(b) deferral limits     $19,500  $19,000
401(k) and 403(b) catch-up deferral limits     $6,500 $6,000
Annual limitation on compensation  $285,000 $280,000
Defined contribution limitation     $57,000 $56,000
Defined benefit limitation  $230,000 $225,000
Highly compensated employee compensation threshold       $130,000 $125,000
Key employee compensation - officer threshold  $185,000 $180,000
SIMPLE deduction $13,500     $13,000
SIMPLE catch-up contribution  $3,000 $3,000
IRA contribution limit   $6,000  $6,000
IRA catch-up contribution limit  $1,000  $1,000
Social Security wage base  $137,700  $132,900

 

For more information or if you have questions, please contact one of the attorneys listed below.

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