Provided by Taylor McClish
The I.R.S. just
increased the annual contribution limits on IRAs, 401(k)s, and other widely
used retirement plan accounts for 2020. Here’s a quick look at the changes.
*Next year, you can put up to $6,000 in any type of IRA. The limit is
$7,000 if you will be 50 or older at any time in 2020.1,2
*Annual contribution limits for 401(k)s, 403(b)s, the federal Thrift
Savings Plan, and most 457 plans also get a $500 boost for 2020. The new annual
limit on contributions is $19,500. If you are 50 or older at any time in 2020,
your yearly contribution limit for one of these accounts is $26,000.1,2
*Are you self-employed, or do you own a small business? You may have a
solo 401(k) or a SEP IRA, which allows you to make both an employer and employee contribution. The ceiling
on total solo 401(k) and SEP IRA contributions rises $1,000 in 2020, reaching
$57,000.3
*If you have a SIMPLE retirement account, next year’s contribution limit
is $13,500, up $500 from the 2019 level. If you are 50 or older in 2020, your
annual SIMPLE plan contribution cap is $16,500.3
*Yearly contribution limits have also been set a bit higher for Health
Savings Accounts (which may be used to save for retirement medical expenses).
The 2020 limits: $3,550 for individuals with single medical coverage and $7,100
for those covered under qualifying family plans. If you are 55 or older next
year, those respective limits are $1,000 higher.4
Taylor McClish may be reached at (503) 239-3060 or Taylor.McClish@cunamutual.com
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information has been derived from sources believed to be accurate. Please note
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Citations.
1 -
irs.gov/retirement-plans/plan-participant-employee/retirement-topics-ira-contribution-limits
[11/8/19]
2 -
irs.gov/newsroom/401k-contribution-limit-increases-to-19500-for-2020-catch-up-limit-rises-to-6500
[11/6/19]
3 -
forbes.com/sites/ashleaebeling/2019/11/06/irs-announces-higher-2020-retirement-plan-contribution-limits-for-401ks-and-more/
[11/6/19]
4 -
cnbc.com/2019/06/03/these-are-the-new-hsa-limits-for-2020.html [6/4/19]