2020 Retirement Plan Contribution Limits

The Internal Revenue Service (IRS) announced 2020 contribution limits for retirement plans and other related items. The most noteworthy highlights of limitations that changed from 2019 to 2020 include the following:

  • The contribution limit for employees who participate in 401(k), 403(b), most 457 plans, and the federal government’s Thrift Savings Plan is increased from $19,000 to $19,500.
  • The catch-up contribution limit for employees aged 50 and over who participate in these plans is increased from $6,000 to $6,500.
  • The limitation regarding SIMPLE retirement accounts for 2020 is increased to $13,500, up from $13,000 for 2019.

The limit on annual IRA contributions remains unchanged at $6,000. The additional catch-up contribution limit for individuals aged 50 and over is unchanged for 2020 and remains $1,000.

IRS Limits20202019
IRA Contribution Limit$6,000$6,000
IRA Catch-Up Contributions (Over age 50)$1,000$1,000
SEP Minimum Compensation$600$600
SEP Maximum Compensation$285,000$280,000
SEP Maximum Contribution$57,000$56,000
SIMPLE Maximum Contributions$13,500$13,000
SIMPLE Catch-Up Contributions$3,000$3,000
401(k), 403(b), Profit Sharing Plans
Annual Compensation$285,000$280,000
Elective Deferrals$19,500$19,000
Catch-Up Contributions$6,500$6,000
Defined Contribution Limits$57,000$56,000
HCE Threshold$130,000$125,000
Defined Benefit Limits$230,000$225,000
Key Employee$185,000$180,000
457 Elective Deferrals$19,500$19,000
Social Security Taxable Wage Base$137,700$132,900

Source: IRS Notice 2019-59

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