There is good news for retirement account savers. For those making contributions to retirement accounts, some of the limits have gone up again in 2020! How will it affect you?
- 401(k) contribution limit $19,500 up from $19,000 (same for 403(b), most 457 plans, and Thrift Savings Plan)
- IRA contribution limit remains $6,000
- Simple IRA contribution limits have increased to $13,500
- Catch-up contribution limit for those over 50 has increased to $6,500 for 401(k)s but remains the same, $1,000, for IRAs
- Income ranges for deductible contributions to IRAs increased
- Income ranges to contribute to a Roth IRA increased
- Income ranges to claim the Saver’s Credit increased
If you have been saving up to the limit, you might want to make the necessary adjustments to your contributions to take advantage of increased limits. The higher limits will be especially helpful to those who are maximum funding their retirement accounts to either retire early or to catch up for lost time.
Retirement planning is a very personal process; one size does not fit all. It is always a good idea to meet with a financial planner to discuss your specific needs and situation. A Certified Financial Planner (CFP®) can help you to make an appropriate decision to work toward meeting your personal needs. Having increased contribution limits might be a great way to help you to work toward your retirement goals.
If you would like to discuss your personal retirement goals and the ways that increased contribution limits might affect your retirement plan, please call our office to schedule an appointment today.
*All tax information from https://www.irs.gov/
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All investing involves risk including loss of principal. No strategy assures success or protects against loss.
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