The IRS has released new guidelines for the 2020 Contribution Limits for company-sponsored retirement plans and they’ve increased! If you’re not sure what they are, Leading Retirement Solutions has you covered.
Retirement Plan Maximum Contributions:
IRS guidelines detail the maximum income that an employee (including company owners) may contribute to a company-sponsored retirement plan as well as the maximum contributions an employee (including company owners) may receive from the business.
Contribution Highlights for 2020:
- $19,500 – The employee contribution limit for employees who participate in 401(k), 403(b), most 457 plans and the federal government’s Thrift Savings Plan.
- $6,500 – The catch-up contribution limit for employees aged 50 and over who participate in 401(k), 403(b), most 457 plans and the federal government’s Thrift Savings Plan.
- $13,500 – The limitation regarding SIMPLE retirement accounts for 2020, up from $13,000 for 2019.
|
2020 |
2019 |
2018 |
401(k), 403(b), Profit-Sharing Plans, etc. |
|||
Annual Compensation |
285,000 |
280,000 |
275,000 |
Elective Deferrals |
19,500 |
19,000 |
18,500 |
Catch-up Contributions |
6,500 |
6,000 |
6,000 |
Defined Contribution Limits |
57,000 |
56,000 |
55,000 |
ESOP Limits |
1,150,000 |
1,130,000 |
1,105,000 |
230,000 |
225,000 |
220,000 |
|
Other |
|||
HCE Threshold |
130,000 |
125,000 |
120,000 |
Defined Benefit Limits |
230,00 |
225,000 |
220,000 |
Key Employee |
185,000 |
180,000 |
175,000 |
457 Elective Deferrals |
19,500 |
19,000 |
18,500 |
Control Employee (board member or officer) |
115,000 |
110,000 |
110,000 |
Control Employee (compensation-based) |
230,000 |
225,000 |
220,000 |
IRAs |
|||
IRA Contribution Limit |
6,000 |
6,000 |
5,500 |
IRA Catch-Up Contributions |
1,000 |
1,000 |
1,000 |
IRA AGI Deduction Phase-out Starting at |
|||
Joint Return |
104,000 |
103,000 |
101,000 |
Single or Head of Household |
65,000 |
64,000 |
63,000 |
SEP |
|||
SEP Minimum Compensation |
600 |
600 |
600 |
SEP Maximum Contribution |
57,000 |
56,000 |
55,000 |
SEP Maximum Compensation |
285,000 |
280,000 |
275,000 |
SIMPLE Plans |
|||
SIMPLE Maximum Contributions |
13,500 |
13,000 |
12,500 |
Catch-up Contributions |
3,000 |
3,000 |
3,000 |
Additional information can be found on the IRS website.
For more tips and information regarding retirement plans, contact us.
