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Each year, the IRS makes cost-of-living adjustments that change the limits placed on contributions to retirement plans. On November 6, 2019, the 2020 limitations for retirement plans and other retirement-related items were announced. Plan sponsors and employers must ensure that they are current on these limits, in order to be compliant and avoid penalties or corrections later. The charts below outline the most common retirement plan limits. There may be others that are also applicable.
| 401k Plan Limits | ||||
|---|---|---|---|---|
| 2020 | 2019 | 2018 | 2017 | |
| Elective Deferrals | $19,500 | $19,000 | $18,500 | $18,000 |
| Catch-Up Contributions | $6,500 | $6,000 | $6,000 | $6,000 |
| Annual Defined Contribution Limit | $57,000 | $56,000 | $55,000 | $54,000 |
| Annual Compensation Limit | $285,000 | $280,000 | $275,000 | $270,000 |
| Highly Compensated Employee | $130,000 | $125,000 | $120,000 | $120,000 |
| Non-401k Related Limits | ||||
|---|---|---|---|---|
| 2020 | 2019 | 2018 | 2017 | |
| Defined Benefit Plans | $230,000 | $225,000 | $220,000 | $215,000 |
| 403(b)/457 Elective Deferrals | $19,500 | $19,000 | $18,500 | $18,000 |
| SIMPLE Employee Deferrals | $13,500 | $13,000 | $12,500 | $12,500 |
| SIMPLE Catch-Up Contribution | $3,000 | $3,000 | $3,000 | $3,000 |
| SEP Annual Compensation Limit | $285,000 | $280,000 | $275,000 | $270,000 |
| Social Security Wage Base | $137,700 | $132,900 | $128,400 | $127,200 |
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