The Treasury Department has announced the 2020 limits for retirement accounts:
The amount you can contribute to your 401(k), 403(b) or similar retirement plans goes up from $19,000 in 2019 to $19,500 in 2020. The 401(k) catch-up contribution limit—if you’re 50 or older—will be $6,500 for workplace plans, up from $6,000.
Those 50 years or older can save $33,000 in tax-advantaged accounts for 2020. If your employer allows after tax contributions or you’re self-employed, you can save more. The overall defined contribution plan limit increases from $56,000 to $57,000. Likewise, for the self-employed and small business owners, the limits for the SEP IRA or solo 401(k) increases from $56,000 in 2019 to $57,000 in 2020.
The limit on contributions to an Individual Retirement Account (pretax or Roth or a combination) remains unchanged at $6,000 for 2020. The catch-up contribution limit remains at $1,000. (Remember that you have until April 15th to make a contribution for the prior year.)
There are income based phaseouts that apply, please contact your investment advisor or accountant if you think this may apply to you (you can still contribute—it’s just nondeductible).
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