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IRS Announces 2020 Cost-of-Living Adjustments
IRS Announces 2020 Cost-of-Living Adjustments
2020 COLA limits
Cost-of-living adjustment affecting dollar limitations for retirement plan contributions and limits in 2020 are slightly higher than 2019, according to an announcement from the Internal Revenue Service (IRS).
The elective contribution annual limit for employees who participate in a 401(k), 403(b), and most 457 plans increases at $19,500. Annual catch-up contributions for employees 50 or older in those plans increases to $6,500.
The new limits are effective January 1, 2020. For a complete list of changes, visit IRS.gov.
Among the cost of living adjustments for 2020 compared to 2019:
|
Item |
2020 |
2019 |
|---|---|---|
|
401(k), SARSEP and 403(b) deferrals* |
$19,500 |
$19,000 |
|
401(k), SARSEP and 403(b) catch-up* |
$6,500 |
$6,000 |
|
Defined contribution limit |
$57,000 |
$56,000 |
|
Maximum compensation |
$285,000 |
$280,000 |
|
457 deferrals and employer contributions* |
$19,500 |
$19,000 |
|
Governmental 457(b) catch-up* |
$6,500 |
$6,000 |
|
SIMPLE deferrals |
$13,500 |
$13,000 |
|
SIMPLE catch-up |
$3,000 |
$3,000 |
|
Highly compensated threshold |
$130,000 |
$125,000 |
|
Key employee – top-heavy plan |
$185,000 |
$180,000 |
|
Social Security taxable wage base |
$137,700 |
$132,900 |
|
Defined benefit limit |
$230,000 |
$225,000 |
* - Includes Roth contributions to 401(k), 403(b) & governmental 457(b) plans.
Provided content is for overview and informational purposes only and is not intended as tax, legal, fiduciary, or investment advice. For answers to specific questions and before making any decisions, please consult a qualified attorney or tax advisor.
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