Happy New Year: Retirement Plan Guidelines for 2020 (Part 1)

Happy New Year everyone!  This blog will focus on 2020 changes in funding to retirement accounts and the next one will cover the 2020 changes to distributions from retirement accounts.  Spoiler alert:  the distribution changes are potentially complicated and we will plan to cover those with you individually as well. 

401K/403B/TSP et al:

• Contribution limit increased to $19,500 (up $500)

• Catch-up contribution limit (for those 50+) increased to $6,500 for a total of $26,000 (up from $25,000)

Roth/Traditional IRA:

• Contribution limit is $6,000 (no change from 2019)

• Catch-up contribution limit (for those 50+) is $1,000 for a total of $7,000 (no change from 2019)

• Income limit eligibility for Roth contribution:

  • Phase-out begins for individuals begins at $124,000 and stops at $139,000 (up $2,000 from 2019)

  • Phase-out begins for couples begins at $196,000 and stops at $206,000 (up $3,000 from 2019)

SEP IRA:

• Contribution limit is 25% of gross salary or $57,000, whichever is less (up $1,000 from 2019)

Let us know if you need help adjusting your contributions or if you have questions about your eligibility.