The IRS has announced the 2020 contribution limits for retirement savings accounts, including contribution limits for 401(k), 403(b), and most 457 plans, SIMPLE IRAs, as well as income limits for IRA contribution destructibility. Contribution limits for Health Savings Accounts (HSAs) have also been announced. Please review an overview of the limits below.
401(k), 403(b), and most 457 plans | ||
2019 | 2020 | |
Age 49 and under | $19,000 | $19,500 |
Age 50 and older | Additional $6,000 | Additional $6,500 |
SIMPLE IRA (Employer Plan) | ||
2019 | 2020 | |
Age 49 and under | $13,000 | $13,500 |
Age 50 and older | Additional $3,000 | Additional $3,000 |
The IRS has also set limits on the total amount that may be contributed to your retirement savings account from all sources combined, including any employer matching or profit-sharing contributions, and any employee after-tax contributions. For 2020, the maximum is typically the lesser of 100% of compensation or $57,000. However, your employer's retirement plan might limit the compensation to something less than 100%; please refer to your plan's Summary Plan Description or plan document for other applicable limits.
The annual compensation limit is $280,000. You can make contributions up to the IRS contribution limits noted above or up to $280,000.
Roth and Traditional IRA contribution limits | ||
2019 | 2020 | |
Age 49 and under | Up to $6,000 (must have employment compensation) | Up to $6,000 (must have employment compensation) |
Age 50 and older | Additional $1,000 | Additional $1,000 |
Traditional IRA modified adjusted gross income limit allowing for taxable deduction | ||
2019 | 2020 | |
Single | $64,000 - $74,000 | $65,000 - $75,000 |
Married - Filing joint returns | $103,000 - $123,000 | $104,000 - $124,000 |
Married - Filing separately | $0 - $10,000 | $0 - $10,000 |
Spousal Contribution for non-earning spouse | $193,000 - $203,000 | $196,000 - $206,000 |
Roth IRA modified adjusted gross income phase-out ranges* | ||
2019 | 2020 | |
Single | $122,000 - $137,000 | $124,000 - $139,000 |
Married - Filing joint returns | $193,000 - $203,000 | $196,000 - $206,000 |
Married - Filing separately | $0 - $10,000 | $0 - $10,000 |
*As of 2010, there is no income limit for taxpayers who wish to convert a traditional IRA to a Roth IRA. | ||
Health Savings Account (HSA) contribution limits | ||
2019 | 2020 | |
Individual (employer + employee) | $3,500 | $3,550 |
Family (employer + employee) | $7,000 | $7,100 |
Age 55 or older** | Additional $1,000 | Additional $1,000 |
**Catch-up contributions can be made any time during the year in which the HSA participant turns 55. | ||
We recommend that you take some time now to see if you can increase your contributions to your employer plan: not everyone can contribute the maximum allowed, but the more you save now, the more your money can grow.
Did you know that one service we provide to clients is review of employer plan allocation? If you provide our staff with a recent statement for your employer plan, we can review it and let you know if we recommend any changes to your fund allocation and future contribution elections.
Please give us a call or send us an email if you have questions or would like us to review your employer plan statement.
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Sources:
https://nb.fidelity.com/public/nb/default/resourceslibrary/articles/irslimits