On November 6, 2019, the Internal Revenue Service (IRS) announced its cost-of-living adjustments affecting dollar limitations for pension plans and other retirement-related items.
These cost-of-living adjustments will take effect on January 1, 2020. Highlights of the adjustments include an increase in the contribution limit for employees who participate in 401(k), 403(b), most 457 plans, and the Federal government’s Thrift Savings Plan.
The chart below outlines all limitation adjustments for 2020:
|401(k), 403(b), Profit-Sharing Plans, etc.|
|Defined Contribution Limits||57,000||56,000|
|IRA Contribution Limit||$6,000||$6,000|
|IRA Catch-Up Contributions||1,000||1,000|
|SIMPLE Maximum Contributions||$13,500||$13,000|
|SEP Maximum Compensation||$285,000||$280,000|
|SEP Maximum Contribution||57,000||56,000|
|SEP Minimum Compensation||600||600|
|5-year Distribution Factor||230,000||225,000|
|Defined Benefit Limits||230,000||225,000|
|457 Elective Deferrals||19,500||19,000|
Contribution Limits that remain unchanged:
The annual contribution limit to an IRA remains at $6,000 and the associated catch-up contribution limit for individuals aged 50 and over, remains at $1,000.
Withum’s Employee Benefits Services Group by filling out the form below.
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