IRS Announces Increases in 2020 Retirement Plan Limits

print November , 2019

Each year, the IRS makes cost-of-living adjustments that change the limits placed on contributions to retirement plans. On November 6, 2019, the 2020 limitations for retirement plans and other retirement-related items were announced. Plan sponsors and employers must ensure that they are current on these limits, in order to be compliant and avoid penalties or corrections later. The charts below outline the most common retirement plan limits. There may be others that are also applicable.

401k Plan Limits    
2020201920182017
Elective Deferrals $19,500$19,000$18,500$18,000
Catch-Up
Contributions
$6,500$6,000$6,000$6,000
Annual Defined Contribution Limit$57,000$56,000$55,000$54,000
Annual Compensation Limit $285,000$280,000$275,000$270,000
Highly Compensated Employee$130,000$125,000$120,000$120,000
Non-401k Related Limits    
2020201920182017
Defined Benefit Plans$230,000$225,000$220,000$215,000
403(b)/457 Elective Deferrals$19,500$19,000$18,500$18,000
SIMPLE Employee Deferrals$13,500$13,000$12,500$12,500
SIMPLE Catch-Up Contribution$3,000$3,000$3,000$3,000
SEP Annual Compensation Limit$285,000$280,000$275,000$270,000
Social Security Wage Base$137,700$132,900$128,400$127,200
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