If saving more for retirement is one of your goals for 2020, there’s good news for you: you can put away more into your retirement account next year.
The IRS has announced inflation-adjusted limits for retirement account savings for 2020. The amount of pre-tax or ROTH contributions you can contribute to your Board of Retirement 403(b)(9) retirement account will be $19,500 in 2020, up from $19,000 in 2019. If you are 50 and over and are looking to make up for lost time, catch-up contribution limits increased as well. The catch-up contribution limit increased from $6,000 in 2019 to $6,500 in 2020.
More good news…since our 403(b)(9) plan allows for employer contributions and after-tax contributions, you have the opportunity to save even more. The overall contribution limit to your retirement account for 2020 is the lesser of 100% of your taxable income or $57,000, up from $56,000 in 2019. The overall limit includes your salary reduction contributions, employer contributions, and after-tax contributions. (To find out more about your different retirement contribution options, click here.)
If you would like to take advantage of these higher contribution limits, fill out a new salary reduction agreement and turn it into your employer (and then send us a copy). If you have any questions, you can contact our office at 877-767-7738.
Other limits included in IRS Notice 2019-59 include:
- The contribution limits for 401(k) plans increase from $19,000 to $19,500 for 2020.
- The contribution limit to an Individual Retirement Account (pre-tax or ROTH) remains the the same in 2020 at $6,000. The catch-up contribution limit stays at $1,000.
- The limitation regarding SIMPLE retirement accounts for 2020 is increased to $13,500.