U.S. tax laws place limits on the dollar amount of contributions to retirement plans and IRAs and the amount of benefits under a pension plan. The Internal Revenue Code (IRC) requires the limits to be adjusted annually for cost-of-living increases. IRS Announces 2019 new Retirement plan contribution limits for 401(K) and more.
Highlights of changes for 2020
- The contribution limit for employees who participate in 401(k), 403(b), most 457 plans, and the federal government’s Thrift Savings Plan is increased from $19,000 to $19,500.
- The catch-up contribution limit for employees aged 50 and over who participate in these plans is increased from $6,000 to $6,500.
- The limitation regarding SIMPLE retirement accounts for 2020 is increased to $13,500, up from $13,000 for 2019.
- SIMPLE Catch-up Contribution Limit remains unchanged at $3,000.
- The limit on annual contributions to an IRA remains unchanged at $6,000. The additional catch-up contribution limit for individuals aged 50 and over is not subject to an annual cost-of-living adjustment and remains $1,000.
The Retirement Plan Company is pleased to present this table for your convenience. Contact Us for more assistance..
| 2020 | 2019 | 2018 | 2017 | |
|---|---|---|---|---|
| 401(k) and 403(b) Deferral Limit | 19,500 | 19,000 | 18,500 | 18,000 |
| 457 Deferral Limit | 19,500 | 19,000 | 18,500 | 18,000 |
| 401(k), 403(b), 457 Catch-up Contribution Limit | 6,500 | 6,000 | 6,000 | 6,000 |
| SIMPLE Deferral Limit | 13,500 | 13,000 | 12,500 | 12,500 |
| SIMPLE Catch-up Contribution Limit | 3,000 | 3,000 | 3,000 | 3,000 |
| Annual Compensation Limit | 285,000 | 280,000 | 275,000 | 270,000 |
| Defined Benefit 415 Limit | 230,000 | 225,000 | 220,000 | 215,000 |
| Defined Contribution 415 Limit | 57,000 | 56,000 | 55,000 | 54,000 |
| Dollar Limit for HCEs | 130,000 | 125,000 | 120,000 | 120,000 |
| Dollar Limit for Key Employee | 185,000 | 180,000 | 175,000 | 175,000 |
| Social Security Taxable Wage Base | 137,700 | 132,900 | 128,400 | 127,200 |