As we settle in to the new year, the IRS has announced the new retirement account contribution guidelines for 2020. As always, contributing more to your retirement accounts now can lead to a lower tax bill – not to mention more invested income in retirement.
Those who contribute to many common types of retirement plans, including 401(k) and 403(b) plans, will be able to increase their annual contribution by $500, to $19,500.
The IRA and Roth IRA annual contribution limits remain unchanged for 2020 – at $6,000. Catch-up contributions for workers ages 50 and older also remain the same, at $1,000.
The income ranges that determine eligibility for deductible contributions to traditional IRAs, Roth IRAs, and to claim the saver’s tax credit also have been increased for 2020. The IRS highlights these changes at IRS.gov, but please talk with your tax professional for specific advice.