INCREASED LIMITS EQUALS MORE OPPORTUNITY TO SAVE
If saving more is one of your goals for 2020, there’s good news—investors now have the opportunity to put even money toward their retirement accounts this year.
The Internal Revenue Service announced that employees in 401(k) plans will be able to contribute up to $19,500 next year. This and other changes in Notice 2019-59 (PDF) provides cost-of-living adjustments affecting dollar limitations for pensions plans and other retirement related items for tax year 2020.
Key changes for 2020:
401(k) salary deferral limit increased $500 to $19,500 per individual 401(k)
Catch-up contributions increased $500 to $6,500 for those over 50
Profit Sharing Plan annual limit increased to $57,000
Health Savings Account (HSA) contribution limits increased to $7,100 for family coverage and $3,550 for individual
Stayed the same:
IRA annual contribution limit at $6,000
IRS catch up contributions at $1,000 for those over 50
Looking ahead
It’s important for investors to keep up with annual limit changes—that is why Cain Watters CPAs work with their clients to plan out their annual budget and savings strategy, ensuring they are aware of limit changes, and creating a plan to maximize the contributions. An essential first step of any plan is to ensure you are taking advantage of the maximum benefit allowed under the law.
Looking to ensure you are taking advantage of the limits as they apply to your personal situation? For a complimentary consultation
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