New IRS contribution limits

A look at the maximum amounts you can put into retirement accounts this year

The IRS just announced the annual contribution limits on IRAs, 401(k)s, and other widely used retirement plan accounts for 2020.

Here’s a quick look at them.

*This year, you can put up to $6,000 in any type of IRA. The limit is $7,000 if you will be 50 or older at any time in 2020.

*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.

*Are you self-employed, or do you own a small business? You may have a solo 401(k), which allows you to make both an employer and employee contribution. The ceiling on total solo 401(k) contributions rises $1,000 in 2020, reaching $57,000. This is also the 2020 employer contribution limit for simplified employee pension (SEP) plans.

*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.