The Internal Revenue Service has announced the 2020 cost-of-living adjustments for various limits affecting employee benefit plans. The more common limits for 2020 and how these numbers compare to 2019 is shown below:
|401(k) & 403(b) Elective Deferrals||$19,500||$19,000|
|Catch-Up Contribution for participants age 50 and over||$6,500||$6,000|
|Defined Contribution Plans-IRC 415 (Including SEP and Keogh Plans)||$57,000||$56,000|
|Maximum Benefit for Defined Benefit Plans
Note: This is not the maximum contribution, it is the maximum benefit that can be funded.
|SIMPLE Retirement Plans|
|Catch-Up Contribution for participants age 50 and over||$3,000||$3,000|
|Maximum Annual Compensation for Determining Contributions and Benefits||$285,000||$280,000|
|Compensation Limit for Key Employee Determination||$185,000||$180,000|
|Compensation Limit for Highly Compensated Determination||$123,000||$125,000|
|IRA Catch-Up Contribution||$1,000||$1,000|
A detailed listing of all of the adjusted limitations can be found here.
For questions or learn more about how these limits apply to you, please contact Mark Flanagan of Aronson’s Compensation and Benefits Practice at 301.231.6257.