Annual Inflation Adjustments for Retirment Plans Announced
The IRS has released the 2020 inflation adjusted limits for qualified retirement plans and IRAs in Notice 2019-59.[1]
The revised numbers and prior 2019 amounts are provided in the table below:
| Type | 2020 Amounts | 2019 Amounts |
|---|---|---|
| Maximum annual benefit-DB Plan (§415) | $ 230,000 | $ 225,000 |
| Contribution limit DC Plan (§415) | 57,000 | 56,000 |
| Annual Compensation Limit (§404(l)) | 285,000 | 280,000 |
| Catch up Contributions to Employer Plan | 6,500 | 6,000 |
| Elective Deferrals (§402(g)) | 19,500 | 19,000 |
| Highly Compensated Employee (§414(q)) | 130,000 | 125,000 |
| Key Employee Compensation (§416(i)) | 185,000 | 180,000 |
| SIMPLE Deferral Limitation (§408(p)) | 13,500 | 13,000 |
| SIMPLE Catch Up Contribution (414(v)(2)(B)) | 3,000 | 3,000 |
| SEP Compensation Limit (§408(k)) | 600 | 600 |
| IRA Limitations | ||
| Maximum IRA Contribution (before catch-up) (§219(b)(5)(A)) | 6,000 | 6,000 |
| Deduction phases out for individuals that are an active participant in an employer plan for adjusted gross income between | Single and Head of Household - $65,000 to $75,000 | Single and Head of Household - $64,000 to $74,000 |
| Married Filing Joint - $104,000 - $124,000 | Married Filing Joint - $103,000 - $123,000 | |
| Married Filing Separate - $0 - $10,000 | Married Filing Separate - $0 - $10,000 | |
| Deduction phases out for individuals whose spouse is an active participant in an employer plan phases out between | $196,000 - $206,000 | $193,000 - $203,000 |
| Roth IRA Maximum Contribution Phaseout Begins: | ||
| Married filing joint | 196,000 | 193,000 |
| Other except married filing separate | 124,000 | 122,000 |
The IRS normally publishes this update each year around the end of October or the beginning of November.
[1] Notice 2019-59, November 6, 2019, retrieved November 6, 2019