Higher 401(k) Limits and More
The IRS released the cost of living adjustments (COLA) for various retirement plan limitations that will take effect on January 1, 2020. 401(k) Plan Sponsors and plan participants enjoy saving even more for retirement.
Many of these limits, including 401(k) deferrals and catch-up deferrals, are increasing.
The limits most frequently asked about are those that are due for an increase! These limits include:
- the annual compensation that is considered for plan purposes,
- the salary deferral 401(k) limit (including catch-up), and
- the total amount that can be contributed on behalf of any participant in a defined contribution (including 401(k)) plan.
|Plan Section Limit||2019||2020|
|Maximum Defined Contribution Annual Additions||$56,000||$57,000|
|Salary Deferral 401(k)/403(b) Limit||$19,000||$19,500|
|Maximum Compensation for Retirement Plan Purposes||$280,000||$285,000|
|HCE Compensation Limit||$125,000||$130,000|
|Key Employee Officer||$180,000||$185,000|
|Key Employee 1% Owner||$150,000||$150,000|
|Social Security Taxable Wage Base||$132,900||$137,700|
More Information on COLA Limit Increase
Learn more about these increases and how they impact your retirement plan by contacting Uniglobal and your Uniglobal consultant or by visiting the IRS website to get a Retirement Savings Check-Up. The IRS page COLA Increases for Dollar Limitations on Benefits and Contributions expands on the highlights in this post.