NEW CONTRIBUTION LIMITS ANNOUNCED
The Internal Revenue Service announced that employees in 401(k) plans can contribute up to $19,500 next year starting in 2020.
This and and other changes in Notice 2019-59 (PDF).
So what’s changed?
The contribution limit for employees who participate in 401(k), 403(b), most 457 plans, and the federal government’s Thrift Savings Plan is increased from $19,000 to $19,500.
The catch-up contribution limit for employees aged 50 and over (who participate in these plans) is increased from $6,000 to $6,500.
The overall contribution limit for a 401(k) remains at $56,000 for the 2020 tax year.
The not-so-common SIMPLE IRA also got a boost. The contribution limits for SIMPLE retirement accounts increased to $13,500 for 2020, up from $13,000 for 2019.
What stays the same?
The annual contribution limit for an IRA remains unchanged at $6,000. The catch-up contribution limit for people aged 50 and over remains at $1,000.
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