There are only 48 days left until we celebrate a new year. Along with the celebration, we also get to improve our contributions to our 401(k). The IRS; will increase the 2020 401(k) contribution from 19,000 to $19,500. For those with extra money to stash into their retirement savings, this is welcomed news.
Federal Employees will also see an increase to $19,500 when contributing to the Thrift Savings Plan.
Other Important Changes to Retirement Contributions
1-Those over the age of 50, who need to catch-up on their contributions get a contribution increase of $500. The limit goes from $6000 to $6500.
2-SIMPLE Retirement accounts also increased $500 to $13,500.
No Change to IRA Contributions
If your primary savings vehicle is an IRA, you won’t see an increase in contribution limits. The limit remains at $6000. If you are over the age of 50 and need to catch-up on your IRA contributions, you won’t see a change either. The catch-up contribution remains at $1k.
Saving today can prepare you for a better tomorrow. If you can take advantage of the new limits, 2020 is waiting for you!