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IRS Updates Funding Limits for 2020

  • by CWA
  • •    November 25, 2019
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INCREASED LIMITS EQUALS MORE OPPORTUNITY TO SAVE

If saving more is one of your goals for 2020, there’s good news—investors now have the opportunity to put even money toward their retirement accounts this year.

The Internal Revenue Service announced that employees in 401(k) plans will be able to contribute up to $19,500 next year. This and other changes in Notice 2019-59 (PDF) provides cost-of-living adjustments affecting dollar limitations for pensions plans and other retirement related items for tax year 2020.

Key changes for 2020:

  • 401(k) salary deferral limit increased $500 to $19,500 per individual 401(k)

  • Catch-up contributions increased $500 to $6,500 for those over 50

  • Profit Sharing Plan annual limit increased to $57,000

  • Health Savings Account (HSA) contribution limits increased to $7,100 for family coverage and $3,550 for individual

Stayed the same:

  • IRA annual contribution limit at $6,000

  • IRS catch up contributions at $1,000 for those over 50

 
Looking ahead

It’s important for investors to keep up with annual limit changes—that is why Cain Watters CPAs work with their clients to plan out their annual budget and savings strategy, ensuring they are aware of limit changes, and creating a plan to maximize the contributions.  An essential first step of any plan is to ensure you are taking advantage of the maximum benefit allowed under the law.

 

Looking to ensure you are taking advantage of the limits as they apply to your personal situation? For a complimentary consultation

REACH OUT TO OUR TEAM

Past performance is not an indicator of future results.  Cain Watters is a Registered Investment Advisor.  Cain Watters only conducts business in states where it is properly registered or is excluded from registration requirements. Registration is not an endorsement of the firm by securities regulators and does not mean the adviser has achieved a specific level of skill or ability.  Request Form ADV Part 2A for a complete description of Cain Watters investment advisory services. Diversification does not ensure a profit and may not protect against loss in declining markets.  No inference should be drawn that managed accounts will be profitable in the future or that the Manager will be able to achieve its objectives.  All investments and strategies have the potential for profit or loss. Different types of investments involve higher and lower levels of risk. Historical performance returns for investment indexes and/or categories, usually do not deduct transaction and/or custodial charges or an advisory fee, which would decrease historical performance results. There are no assurances that an investor’s portfolio will match or exceed any specific benchmark.  This is not intended to be personalized financial advice and is not a recommendation for any particular security or strategy.

Cain Watters is a Registered Investment Advisor.  Cain Watters only conducts business in states where it is properly registered or is excluded from registration requirements. Registration is not an endorsement of the firm by securities regulators and does not mean the adviser has achieved a specific level of skill or ability.  Request Form ADV Part 2A for a complete description of Cain Watters investment advisory services. Diversification does not ensure a profit and may not protect against loss in declining markets.  Past performance is not an indicator of future results. 

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