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IRS Announces Higher 2020 Retirement Plan Contribution Limits

Posted by Sierra Betterley on Nov 6, 2019 11:35:22 AM


Today, the Internal Revenue Service announced cost of living adjustments affecting dollar limitations for pension plans and other retirement-related items for tax year 2020. 

Technical guidance detailing these items are in Notice 2019-59.

The following table details the plan contribution limits by year for your convenience.

PLAN TYPE 2020 2019
401(k), 403(b), most 457 plans, and the federal government’s Thrift Savings Plan $19,500 $19,000
Catch-up for 50 and older $6,500 $6,000
 PLAN TYPE 2020 2019
IRA Contributions $6,000 $6,000
Catch-up for 50 and older $1,000 $1,000

Other limits included in IRS Notice 2019-59 include:

  • Effective January 1, 2020, the limitation on the annual benefit under a defined benefit (DB) plan under § 415(b)(1)(A) is increased from $225,000 to $230,000.
  • The limitation for defined contribution (DC) plans under § 415(c)(1)(A) is increased in 2020 from $56,000 to  $57,000.
  • The annual compensation limit under §§ 401(a)(17), 404(l), 408(k)(3)(C), and408(k)(6)(D)(ii) is increased from $280,000 to $285,000.
  • The dollar limitation under § 416(i)(1)(A)(i) concerning the definition of “key employee” in a top-heavy plan is increased from $180,000 to $185,000.
  • The limitation used in the definition of “highly compensated employee” under§ 414(q)(1)(B) is increased from $125,000 to $130,000.

Topics: IRS, contribution limits, irs bulletin, 2020

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