The Internal Revenue Service announced on Wednesday,
November 6, that several contribution limits in qualified
retirement plans will increase next year.
The IRS announced the increases as part of an annual adjustment
for cost-of-living increases as provided in the Internal Revenue
Code. According to IRS Notice 2019-59, employees participating in
401(k) plans may contribute up to $19,500 in 2020, up from $19,000
for this year. This increase also applies to 403(b) plans, most 457
plans, and the federal government's Thrift Savings Plan. In
addition, the catch-up contribution limit available to employees
aged 50 or older will increase from $6,000 to $6,500 in 2020.
The limit on the annual benefit for a participant under a
defined benefit plan will increase from $225,000 to $230,000 in
2020. In addition, the limit on the annual benefit for a
participant under a defined contribution plan has increased from
$56,000 to $57,000 for 2020.
