If you missed the announcement of higher retirement plan limits for 2020, here’s another look at some of them.
WORK PLANS
The annual limit for defined benefit plans rose from $225,000 to $230,000, while the combined (employer/employee) annual limit for 401(k), 403(b) and most 457 plans rose $1,000 to $57,000. The latter limit includes a $500 increase to $19,500 for employee contributions, and catch-up contributions, which also rose from $6,000 to $6,500 for those at least age 50. Limits for top-heavy retirement plans and employee stock ownership plans also increased.
IRAS
The income limit to qualify for tax-deductible IRAs also increased for 2020. A couple with neither spouse participating in a workplace plan qualifies for a full deduction up to $196,000 of joint annual income, up $3,000. Other tax filers also saw increases in income limits. Contribution limits stay at $6,000 annually (plus another $1,000 catch-up).