Locke Lord QuickStudy: IRS Announces 2020 Retirement Plan Limitations – Most Limits are Increased

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    The Internal Revenue Service announced the 2020 cost-of-living adjustments to the dollar limitations for qualified retirement plans and other benefits, and the Social Security Administration announced its own cost-of-living adjustments for 2020.  The elective deferral contribution limit for 401(k), 403(b) and 457(b) plans will increase to $19,500 and the dollar limit for catch-up contributions (if age 50 or older) will increase to $6,500.  Other limits, such as the annual compensation limit under 401(a)(17), the limit used in the definition of key employee and the maximum annual contribution limit under Code Section 415, also will increase in 2020.




    2020 Limits

    2019 Limits

    401(k)/403(b)/457(b) Elective Deferrals



    Catch-Up Contribution (plans other than SIMPLE plans)



    SIMPLE Plan Employee Deferrals



    SIMPLE Plan Catch-Up Contributions



    Plan Maximum Annual Contribution – Defined Contribution Plans (Section 415(c))



    Maximum Annual Benefit – Defined Benefit Plans (Section 415(b))



    Compensation Limit under Section 401(a)(17)



    Highly Compensated Employee Definition under Section 414(q)



    Key Employees Officer Compensation for Top-Heavy Plans



    ESOP limit for determining the maximum account balance subject to the 5-year distribution limit



    ESOP dollar amount used for determining the lengthening of the 5-year distribution period



    Social Security (FICA) Wage Base






    Health Savings Account and High Deductible Health Plan Limits

    Earlier this year, the IRS announced the inflation-adjusted amounts for health savings account and high-deductible health plans for 2020.  The HSA limit for self-only/family coverage will increase to $3,550 and $7,100, respectively for 2020. The maximum annual out-of-pocket expense limits for high deductible health plans for both self-only and family coverage and the minimum annual deductible will increase in 2020.


    Health Savings Accounts/HDHP Limits


    2020 Limits

    2019 Limits

    HSA Contribution -- Annual Contribution Limit

    Self-Only Coverage



    Family Coverage



    Catch-Up Contributions (age 55 or older)



    High Deductible Health Plan – Minimum Annual Deductible

    Self-Only Coverage



    Family Coverage



    High Deductible Health Plan – Maximum Out of Pocket Limit

    Self-Only Coverage



    Family Coverage





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