Think of this as a friendly alert to double check your personal retirement contribution amounts with your HR or payroll department to ensure you continue contributing at the maximum amount as that limit has increased for 2020.
For business owners, this is great information to share with employees who are maxing out so they can continue fully maximizing their retirement savings potential.
Looking for additional guidance personally or for your employees? Reach out to R&R Wealth Management with questions: MyKnowledgeAdvisor.com / 262.696.5167.
2020 Contribution and Benefit Limits
For 401(k) and other Qualified Plans
|
Type of Limitation |
2020 |
2019 |
|
401(k), 457 and 403(b) maximum annual elective deferral limit |
$19,500 |
$19,000 |
|
401(k), 403(b), or 457 plans catch-up contribution limit for individuals aged 50 or over |
$6,500 |
$6,000 |
|
Defined contribution plan annual limit |
Lesser of: $57,000, or 100% of compensation |
Lesser of: $56,000, or 100% of compensation |
|
SIMPLE maximum annual elective deferral limit |
$13,500 |
$13,000 |
|
SIMPLE 401(k) or SIMPLE IRA catch-up contribution limit for individuals aged 50 or over |
$3,000 |
$3,000 |
|
Traditional IRA contribution limit |
Lesser of: $6,000, or 100% of compensation |
Lesser of: $6,000, or 100% of compensation |
|
Traditional IRA catch-up contribution limit for individuals aged 50 or over |
$1,000 |
$1,000 |
|
Defined Benefit plan annual limit under section 415 |
$230,000 |
$225,000 |
|
Annual allowable compensation limit for deduction, benefit and contribution purposes |
$285,000 |
$280,000 |
|
Highly Compensated Employee |
$130,000* |
$125,000* |
|
Key Employee/officer in a top heavy plan |
$185,000 |
$180,000 |
|
Income subject to Social Security tax |
$137,700 |
$132,900 |
*Applies for determining Highly Compensated Employees for the 2020 plan year.
Limits stated above are subject to the provisions of the plan. Refer to your plan document or contact your plan consultant (TPA) for more information.
The content of this document is for general information only and is believed to be accurate and reliable as of posting date but may be subject to change.
