Annual Limitations
Qualified retirement plans are funded by contributions from employers and/or employees. These contributions are subject to a number of annual limitations. Compliance with these limitations is important since the qualification of the plan is at stake.
HAVE ANY LIMITATIONS INCREASED FOR 2020?
The following limits have increased for 2020:
- 401(k) Elective Deferrals increased to $19,500 from $19,000
- The Annual Addition Dollar Maximum increased to $57,000 from $56,000
- The Annual Compensation Limit increased to $285,000 from $280,000
- The SEP Annual Compensation Limit increased to $285,000 from $280,000
- The Annual Defined Benefit Plans Limit increased to $230,000 from $225,000
- The Social Security Wage Base increased to $137,700 from $132,900
WHAT ARE THE ANNUAL LIMITATIONS FOR 2020?
| 2020 Limitations | 2019 Limitations | ||
| Defined Benefit Dollar Maximum | $230,000 | $225,000 | |
| Annual Addition Dollar Maximum | $57,000 | $56,000 | |
| Employee 401(k)/403(b)/457 Contributions | $19,500 | $19,000 | |
| Catch-up Contributions (Age 50 or older) | $6,500 | $6,000 | |
| Highly Compensated Employee Threshold | $130,000 | $125,000 | |
| Annual Compensation | $285,000 | $280,000 | |
| Social Security Taxable Wage Base | $137,700 | $132,900 | |
| Self-only HSA contribution limit | $3,550 | $3,500 | |
| Family HSA contribution limit | $7,100 | $7,000 |