2020 Inflation Adjustments for Pension Plans, Retirement Accounts Released07 November 2019
The 2020 cost-of-living adjustments (COLAs) were released for
- -pension plan dollar limitations, and
- -other retirement-related provisions.
Highlights of Changes for 2020
The contribution limit increased from $19,000 to $19,500 for employees who take part in:
- -most 457 plans, and
- -the federal government’s Thrift Savings Plan
The annual limit on contributions to an IRA remains unchanged at $6,000.
The catch-up contribution limit for individuals 50 and over remains $1,000.
The income ranges increased for determining eligibility to make deductible contributions to:
- -ROTH IRAs, and
- -to claim the Saver’s Credit.
Taxpayers can deduct contributions to a traditional IRA if they meet certain conditions. The deduction phases out if the taxpayer or their spouse takes part in a retirement plan at work. The phase out depends on the taxpayer’s filing status and income.
- -Single taxpayers covered by a workplace retirement plan, the phase-out range is $65,000 and $75,000, increased from between $64,000 and $74,000.
- -Joint filers, when the spouse making the contribution takes part in a workplace retirement plan, the phase-out range is $104,000 and $124,000.
- -An IRA contributor, who is not covered by a workplace retirement plan but their spouse is, the phase out is between $196,000 and $206,000.
- -A married individual covered by a workplace plan filing a separate return, the phase-out range remains $0 to $10,000. The phase-out ranges for Roth IRA contributions are
- -$124,000 to $139,000 for singles and heads of household
- -$196,000 to $206,000, for joint filers, and
- -$0 to $10,000 for married separate filers.
Finally, the income limit for the Saver’ Credit is:
- -$64,000 for joint filers,
- -$48,000 for heads of household, and
-$32,500 for singles and married separate filers.