The Internal Revenue Service (IRS) has announced cost-of-living adjustments for 2020, which affect dollar limitations for retirement plans and other retirement-related items.
The 2020 limits are highlighted below:
- 401(k), 403(b) and most 457 Plans Deferral Limit – Increase from $19,000 to $19,500
- Catch-up Deferral Limit – Increase from $6,000 to $6,500
- Defined Contribution Plan Maximum Annual Additions– Increase from $56,000 to $57,000
- Defined Benefit Plan Maximum Annual Benefit– Increase from $225,000 to $230,000
- Annual Compensation Limit– Increase from $280,000 to $285,000
- Key Employee Limit– Increase from $180,000 to $185,000
- Social Security Wage Base– Increase from $132,900 to $137,700
- Income limit for the Saver’s Credit (also known as the Retirement Savings Contributions Credit) for low- and moderate-income workers – Increase from $64,000 to $65,000 for married couples filing jointly; increase from $48,000 to $48,750 for heads of household; and increases in $32,000 to $32,500 for singles and married individuals filing separately
Please reach out to a Bolton Investment Consultant for more information.