Compliance Alert: IRS Announces New Retirement Plan Limits for 2020

On November 6, 2019, the IRS announced the new 2020 retirement plan limits. The applicable cost of living index increased sufficiently, allowing many standard limits to increase for 2020. The elective deferral limit under 402(g), for example, increased by $500 to $19,500. Similarly, the catch-up deferral limitation for those who are age 50 or older on 12/31/2020 also increased by $500, to $6,500, allowing these individuals to defer $26,000 in 2020. The Social Security Administration (SSA) also announced that the maximum amount of earnings subject to the Social Security tax (taxable maximum) will increase to $137,700 in 2020, up from the 2019 limit of $132,900.

Here is a chart showing some of the new limits:

For more details, see this release from the IRS or visit the SSA website.

Note: This feature is to provide general information only, does not constitute legal advice, and cannot be used or substituted for legal or tax advice. Opinions expressed are those of the author, and do not necessarily represent the opinions of Cammack Retirement Group.

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