Retirement Plan Contribution Limits

The Internal Revenue Service (IRS) has announced the following retirement plan contribution limits for the 2020 tax year. 2019 contribution limits are listed at the bottom of the page for added convenience.

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2020 Tax Year:

IRA Contributions

An individual must have received an equivalent amount of earned income during the tax year to contribute to an IRA.

Traditional: $6,000 (unchanged from 2019)

Roth: $6,000 (unchanged from 2019)

Catch-up contribution (age 50 & older): $1,000 (unchanged from 2019)

Maximum contribution (age 50 & older): $7,000

 

Roth IRA Eligibility Phase-Out
Modified Adjusted Gross Income (MAGI) Range

Single filer/head of household: $124,000 – $139,000 (up from $122,000 – $137,000 in 2019)

Married couples, filing jointly: (IRA contributor covered by an employer plan): $104,000 – $124,000 (up from $103,000 – $123,000 in 2019)

Married couples, filing jointly: (IRA contributor not covered by an employer plan & spouse is covered): $196,000 – $206,000 (up from $193,000 – $203,000 in 2019)

Married couples, filing separately: $0 – $10,000 (unchanged from 2019; not subject to a COLA)

 

Age-Based IRA Contributions Limits

With the passing of the SECURE Act in late 2019, effective January 1, 2020, there is no longer an age-based limit on making contributions to a Traditional IRA.

Contributions to a Roth IRA or SEP IRA are still permitted regardless of age, as are conversions to a Roth IRA, as long as the individual making the contribution received an equivalent amount of earned income during the tax year.

Conversions from a Traditional IRA to a Roth IRA are permitted regardless of the amount of earned income.

 

Contributions to 401(k), 403(b) & most 457 plans, as well as the Federal Government’s Thrift Savings Plan (TSP)

Standard limit: $19,500 (a $500 increase from 2019)

Catch-up contributions (age 50 & older): $6,500 (a $500 increase from 2019)

Maximum contribution (age 50 & older): $26,000 (a $1,000 increase from 2019)

 

For additional information on retirement plan contributions and limits, see Retirement Topics – Contributions on IRS.gov

 

Social Security Cost-of-Living Adjustment (COLA)

Effective January 1, 2020, Social Security benefits are set to increase by 1.6% for eligible beneficiaries, lower than 2019’s 2.8% but higher than the 1.4% average over the last decade.


Federal Pension COLA

Civil Service Retirement System (CSRS): 1.6%, down from 2.8% in 2019 but higher than the 1.3% average over the last decade.

Federal Employees Retirement System (FERS): 1.6%, down from 2.0% in 2019 but higher than the 1.3% average over the last decade.

 

For details on retirement related 2020 COLA adjustments, see COLA Increases for Dollar Limitations on Benefits and Contributions on IRS.gov.

 

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2019 Tax Year:

IRA Contributions

Traditional: $6,000

Roth: $6,000

Catch-up contribution (age 50 & older): $1,000 (unchanged from 2018)

Maximum contribution (age 50 & older): $7,000

 

IRA Contributions After Age 70 1/2

No regular contributions to a traditional IRA in the year you reach 70 1/2 and older.
Contributions to a Roth IRA, SEP IRA and rollover contributions to a Roth or traditional IRA are permitted regardless of age.

 

Contributions to 401(k), 403(b) & most 457 plans, as well as the Federal Government’s Thrift Savings Plan (TSP)

Standard limit: $19,000 (increased from $18,500 in 2018)

Catch-up contributions (age 50 & older): $6,000 (unchanged from 2018)

Maximum contribution (age 50 & older): $25,000 (increased from $24,500 in 2018)

 

Roth IRA Eligibility Phase Out
Modified Adjusted Gross Income (MAGI) range:

Single filer/head of household: $122,000 – $137,000 (up from $120,000 – $135,000 in 2018)

Married couples, filing jointly: $193,000 – $203,000 (up from $189,000 – $199,000 in 2018)

Married couples, filing separately: $0 – $10,000 (unchanged from 2018)

 

Social Security Cost of Living Adjustment (COLA)

Effective January 1, 2019, Social Security benefits are set to increase to 2.8% for eligible beneficiaries.


Federal Pension COLA

Civil Service Retirement System (CSRS) – 2.8%
Federal Employees Retirement System (FERS) – 2%

 
Sources:

IRS.gov - https://www.irs.gov/newsroom/401k-contribution-limit-increases-to-19500-for-2020-catch-up-limit-rises-to-6500
SSA.gov -  https://www.ssa.gov/news/press/factsheets/colafacts2020.pdf
MyFederalRetirement.com - https://www.myfederalretirement.com/fers-csrs-cola-watch/
 

This information is not intended to be a substitute for individual tax advice. We suggest that you discuss your specific tax issues with a qualified tax professional.