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McDonald Hopkins issues alert on IRS announces new retirement plan limitations for 2020

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November 21, 2019
McDonald Hopkins attorneys Antoinette Pilzner, John Wirtshafter, and Dale Vlasek from our employee benefits practice group prepared this alert on the new retirement plan limitations for 2020.
 
On November 6, 2019, the IRS announced cost of living adjustments affecting dollar limitations for pension plans and other retirement-related items for the 2020 tax year. Changes to the limits are based on the Social Security cost-of-living increases. Similar to last year, most of the applicable pension and retirement limitations will increase for the 2020 tax year.  
 
Below are the new 2020 plan limitations:
 
  2020 2019
401(k),403(b) and 457(b) deferral limits $19,500 $19,000
401(k) and 403(b) catch-up deferral limits     $6,500 $6,000
Annual limitation on compensation  $285,000 $280,000
Defined contribution limitation     $57,000 $56,000
Defined benefit limitation $230,000 $225,000
Highly compensated employee compensation threshold       $130,000 $125,000
Key employee compensation - officer threshold  $185,000 $180,000
SIMPLE deduction $13,500     $13,000
SIMPLE catch-up contribution  $3,000 $3,000
IRA contribution limit  $6,000 $6,000
IRA catch-up contribution limit  $1,000  $1,000
Social Security wage base  $137,700  $132,900
 
About McDonald Hopkins
Founded in 1930, McDonald Hopkins is a business advisory and advocacy law firm with locations in Chicago, Cleveland, Columbus, Detroit, Miami, and West Palm Beach. With more than 50 service and industry teams, the firm has the expertise and knowledge to meet the growing number of legal and business challenges our clients face. For more information about McDonald Hopkins, visit mcdonaldhopkins.com.
Contact:
David Carducci, Communications Specialist
dcarducci@mcdonaldhopkins.com, (216) 348-5814

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