Retirement Plan Contribution Limits Increase in 2020 – Did You Know?
IRS limits for individual contributions to employer-sponsored retirement plans are increasing in 2020. If you are an employee who participates in 401(k), 403(b), the Thrift Savings Plan for civil and uniformed service members, or most types of 457 plans, you may contribute up to $19,500 in 2020, up from $19,000 in 2019. The catch-up contribution limit for employees 50 years of age or older also increases in 2020, from $6,000 to $6,500. Therefore, if you are an employee age 50 or over, you may be able to contribute as much as $26,000 to your 401(k) in 2020.
The contribution limit for SIMPLE retirement accounts likewise increases by $500 in 2020, from $13,000 to $13,500. In addition, income limits for both Roth IRA contributions and tax-deferred contributions to traditional IRAs are higher. A qualified tax advisor can help you develop a strategy to take advantage of all these increases to boost your retirement savings in the New Year.