IRS Indexed Limits for 2020

Every year, the IRS indexes limits to qualified retirement plans. Attached is the update for 2020.

What is important to be aware of is that now contributions to your 401(k) or 403(B) that are taken out of your paycheck, go up from $19,000 to $19,500. 457 limits for not-for-profit organizations are also at $19,500. And then there is a catch-up provision for people that are close to retirement (at age 50 or 55), who can add another $6,500.

The total contributions for defined contribution plans, which are profit-sharing 401(k) type plans, is a total of $57,000 plus the catch-up, which would bring you to a $63,500 maximum.

If you’re setting up a defined benefit plan, the dollar limit to which you could fund has increased from $225,000 to $230,000 and your Social Security wage-based taxation has increased from $132,900 to $137,700. 

The handy little guide below will allow you to know what’s going on with the 2020 changes for tax limits to retirement savings contributions.

IRS Indexed Limits for 2020

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