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IRS Announces 2020 Dollar Limitations for Retirement Plans

    Client Alerts
  • November 15, 2019

The IRS has announced the 2020 annual dollar limitations for retirement plans based on the applicable cost-of-living adjustment guidelines. The annual limit for elective deferrals to 401(k) and 403(b) plans will increase from $19,000 to $19,500 and the annual limit for catch-up contributions for individuals age 50 or over will increase from $6,000 to $6,500. The Social Security Administration also recently announced that the Social Security wage base will increase from $132,900 for 2019 to $137,700 for 2020.

Listed below are the principal limits applicable for 2020 and 2019.

Limit 2020 2019

Compensation Limit

$285,000

$280,000

Elective Deferrals (401(k), 403(b), 457(b))

$19,500

$19,000

Catch-up Contributions

$6,500

$6,000

Defined Contribution Plan 415 Limit

$57,000

$56,000

Defined Benefit Plan 415 Limit

$230,000

$225,000

Highly Compensated Employee

$130,000

$125,000

Social Security Wage Base

$137,700

$132,900

SIMPLE Plan Limit

$13,500

$13,000

SIMPLE Catch-up Contributions

$3,000

$3,000