The Internal Revenue Service (IRS) has announced cost-of-living adjustments for 2020, which affect dollar limitations for retirement plans and other retirement-related values. All limits increased from 2019 to 2020. The 2020 limits are as follows:
- 401(k) Deferral Limit – Increase from $19,000 to $19,500
- Catch-up Deferral Limit – Increase from $6,000 to $6,500
- Defined Contribution Plan Maximum Annual Additions – Increase from $56,000 to $57,000 (or $63,500 with catch-up)
- Defined Benefit Plan Maximum Annual Benefit – Increase from $225,000 to $230,000
- Annual Compensation Limit – Increase from $280,000 to $285,000
- HCE Compensation Limit – Increase from $125,000 to $130,000
- Key Employee Limit – Increase from $180,000 to $185,000
- Social Security Wage Base – Increase from $132,900 to $137,700
Click HERE for a complete list of 2020 retirement plan limits