If you are preparing for retirement and using your 401(k) as the primary savings vehicle; you will be happy to know that you can now add more money to your account in the coming year. According to the IRS.gov website; in 2020, you can contribute $19,500 to your 401(k) account. This is an increase of $500 from last year’s limit.
This limit also applies to federal employees utilizing the Thrift Savings Plan.
Here are a few other notable changes:
1-Catch-up contributions for those over the age of 50 has increased from $6000 to $6500.
2-SIMPLE Retirement accounts will also increase from $13,000 to $13,500.
One Annual Contribution Remains The Same
For those of you that contribute to an IRA, the yearly contribution of $6k will be the same in the upcoming year. This also includes the catch-up rate for those 50 and older.
Take advantage of these changes to the 401(k) contribution limits to ensure you’re getting the most out of your retirement savings.
Tamila McDonald has worked as a Financial Advisor for the military for past 13 years. She has taught Personal Financial classes on every subject from credit, to life insurance, as well as all other aspects of financial management. Mrs. McDonald is an AFCPE Accredited Financial Counselor and has helped her clients to meet their short-term and long-term financial goals.