For 2020, quite a few of the contribution limits have increased.
A very good practice is to contribute enough of your salary to receive at least the employer match. Also, pay raises often present an easy opportunity to increase your deferral, while reducing your adjusted gross income.
If you will be celebrating your 50th birthday this year, it is also a good time to make sure that your HR Department enables the ‘catch-up’ provision on your employer sponsored plan. This will help you meet the maximum contribution limits throughout the year. The contribution limits for nearly all types of retirement plans are listed in the following chart:
| Qualified Plans | ||
|---|---|---|
| 401k, Roth 401k, and 403b plans | ||
| Catch-up for ages 50 & over | ||
| 457 Plans of tax exempt employers | ||
| Catch-up for ages 50 & over | ||
| SIMPLE IRA or SIMPLE 401k plans | ||
| Catch-up for ages 50 & over | ||
| Limits on annual additions to SEP Plans | ||
| Traditional and Roth IRAs | ||
| Catch-up for ages 50 & over | ||
| HSA - single (employer & employee) | ||
| HSA - family (employer & employee) | ||
| Catch-up for ages 55 & over |
Still unsure how much (and in which accounts) you should be contributing to? Completing a financial plan may be your first step in understanding how to take advantage of the best investment accounts for your situation. Contact us today to see how we can help you with a new plan to get on track for 2020.
