Atlanta Financial Newsroom
New IRS Contribution Limits: Changes for 2020
January 14, 2020
The IRS just increased the annual contribution limits on IRAs, 401(k)s, and other widely used retirement plan accounts for 2020. Here’s a quick look at the changes.
- Next year, those who qualify can contribute up to $6,000 to any type of IRA. The limit is $7,000 if you will be 50 or older at any time in 2020.1,2,
- Annual contribution limits for 401(k)s, 403(b)s, the federal Thrift Savings Plan, and most 457 plans also get a $500 boost for 2020. The new annual limit on contributions is $19,500. If you are 50 or older at any time in 2020, your yearly contribution limit for one of these accounts is $26,000.1,2
- Are you self-employed, or do you own a small business? You may have a solo 401(k) or a SEP IRA, which allows you to make both an employer and employee contribution. The ceiling on total solo 401(k) and SEP IRA contributions rises $1,000 in 2020, reaching $57,000.3
- If you have a SIMPLE retirement account, next year’s contribution limit is $13,500, up $500 from the 2019 level. If you are 50 or older in 2020, your annual SIMPLE plan contribution cap is $16,500.
- Yearly contribution limits have also been set a bit higher for Health Savings Accounts (which may be used to save for retirement medical expenses). The 2020 limits: $3,550 for individuals with single medical coverage and $7,100 for those covered under qualifying family plans. If you are 55 or older next year, those respective limits are $1,000 higher.
We encourage all of our clients who are still working to discuss with your advisor the retirement savings strategies that are right for you, and if any change is warranted for 2020.
Footnotes, disclosures, and sources:
The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright 2019 FMG Suite.
The Setting Every Community Up for Retirement Enhancement (“SECURE”) Act was signed into law on December 20, 2019. With all of the discussion in the news around the political uncertainty, impeachment, and the looming trade war, one of the largest changes to retirement savings laws in recent years was passed with very little fanfare. However, some of the changes will be significant. I have tried to highlight what may impact the majority of our clients and readers.
The Act has a lot of positives such as simplifying rules and making 401k plans potentially available to more workers, pushing back the RMD age, and allowing contributions to IRAs past age 70. The negative impact I see is the elimination of the stretch IRA which is a clear move by the government to raise tax revenues by forcing money out of inherited IRAs sooner. I will discuss in more detail below, but this should be a time to review beneficiaries and discuss whether any change in your legacy planning should be made in response to the new laws. What do you need to pay attention to?
Recently, my husband and I took care of our 12-month old granddaughter while our daughter and son-in-law took a much-needed vacation together. When they dropped her off, their parting words were, “She is almost ready to walk, but make sure she waits until we get home!”
Famous last words… Of course, as soon as they left the house, she was trying to walk – literally everywhere. And after about 24 hours she was taking her first baby steps. By the time they arrived back three days later, she was walking (a little unsteadily but walking none-the-less) and was very proud of herself. Great strides in just a few days but predicated on all of the trial and error and lessons learned in the months before.
Financial planning is a little like this. You’ll make mistakes along the way – everyone does. But you will do a lot of things right as well and the important thing to remember is that your financial health is based on doing the little things right, all along the way.
So, what should you be doing when you are 22, 52 or 72? Here are three important tips for each decade.
Cathy Miller Receives the Women’s Choice Award® as Highly Recommended Financial Advisor by Women for Women for Seventh Consecutive Year
Atlanta – November 19, 2019 – Atlanta Financial Associates, an independent financial advisory firm, recently announced that Cathy Miller, MBA, CFP® , CRPS®, CDFA™, has received the Women’s Choice Award® for Financial Advisors and Firms.
As the leading advocate for female consumers, WomenCertified Inc. selected Miller based on rigorous research and specific objective criteria; she has received this recognition every year since 2013.