The Internal Revenue Service (IRS) has announced the cost‑of‑living adjustments affecting pension plans and other retirement-related limitations for the 2020 tax year. Although many of the limits remain unchanged from 2019, some of the highlights include:
- The annual elective deferral limit is increased from $19,000 to $19,500
- The annual age 50+ catch-up contribution limit increased from $6,000 to $6,500
- The annual additions limit will increase from $56,000 to $57,000
- The annual benefit under a defined benefit plan will increase from $225,000 to $230,000
- The annual compensation limit will increase from $280,000 to $285,000
- The annual compensation limits for highly compensated and key employees will increase to $130,000 and $185,000 respectively
For additional information, download our 2020 Maximum Benefits and Contribution Limits reference material.