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The 2020 Retirement Plan Contribution Limits

DWC 11/6/19

The IRS has released the 2020 contribution limits! Since not everyone was awaiting them quite as eagerly as we were, here is a quick summary.

The good news is that both the 401(k) deferral limit and overall contribution/benefit limits increased, as did the maximum compensation limit. 

Here's a rundown of the 2020 limits:

Compensation and Benefit Limits 

  • Annual compensation limit
    • Increases from $280,000 to $285,000
  • Salary deferral limit for 401(k) and 403(b) plans
    • Increases from $19,0000 to $19,500
  • Salary deferral limit for SIMPLE IRA
    • Increases from $13,000 to $13,500
  • Salary deferral limit for 457 plans
    • Increases from $19,000 to $19,500
  • Catch-up contribution limit for 401(k) plans
    • Increases from $6,000 to $6,500
  • Catch-up contribution limit for SIMPLE IRAs
    • Remains unchanged at $3,000 
  • Annual additions limit for defined contribution plans
    • Increases from $56,000 to $57,000
  • Annual additions limit for defined benefit plans
    • Increases from $225,000 to $230,000
  • Social Security Wage Base
    • Increases from $132,900 to $137,700

Testing Limits

  • Highly compensated employee
    • Increases from $125,000 to $130,000
  • Key employee based on officer status
    • Increases from $180,000 to $185,000
  • Key employee based on 1% owner compensation
    • Remains unchanged at $150,000

 You can find a chart of these limits from 2011 to 2020 here in the DWC Knowledge Center.

Access the Knowledge Center

Topics: 401(k) Plan, 403(b), Defined Benefit, Defined Contribution, SIMPLE, 401(k) Contribution Limits, Plan Sponsor Requirements

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