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2020 Cost of Living Adjustments

The Internal Revenue Service has announced the 2020 cost of living adjustments to various limits. The adjusted amounts generally apply for plan years beginning in 2020. Some of the adjusted amounts, however, apply to calendar year 2020.

Employee Benefit Plans

Plan Year 2020 2019

401(k), 403(b), 457 deferral limit

$19,500

$19,000

Catch-up contribution limit (age 50 or older by end of year)

$6,500

$6,000

Annual compensation limit

$285,000

$280,000

Annual benefits payable under defined benefit plans

$230,000

$225,000

Annual allocations to accounts in defined contribution plans

$57,000
(but not more than 100% of compensation)

$56,000
(but not more than 100% of compensation)

Highly compensated employee Compensation more than $130,000 in 2019 plan year Compensation more than $125,000 in 2018 plan year

          

Health Savings Accounts

Calendar Year 2020 2019
Maximum contribution
  • Family
  • Self
  • $7,100
  • $3,550
  • $7,000
  • $3,500

Catch-up contribution
(participants who are 55 by end of year)

  • $1,000
  • $1,000
Minimum deductible
  • Family
  • Self
  • $2,800
  • $1,400
  • $2,700
  • $1,350
Maximum out-of-pocket
  • Family
  • Self
  • $13,800
  • $6,900
  • $13,500
  • $6,750

                

Social Security

Calendar Year 2020 2019

Taxable wage base

$137,700

$132,900

Maximum earnings without loss of benefits
  • Under full retirement age
  • Year you reach full retirement age

  • $1,520/mo. ($18,240/yr.)
  • $4,050/mo. up to month of full retirement age ($48,600/yr.)

  • $1,470/mo. ($17,640/yr.)
  • $3,910/mo. up to month of full retirement age ($46,920/yr.)

                         

Social Security Retirement Age

Year of Birth Retirement Age
Prior to 1938 Age 65
1938 65 and 2 months
1939 65 and 4 months
1940 65 and 6 months
1941 65 and 8 months
1942 65 and 10 months
1943 - 1954 66
1955 66 and 2 months
1956 66 and 4 months
1957 66 and 6 months
1958 66 and 8 months
1959 66 and 10 months
1960 and later 67
© 2019 Varnum LLP

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About this Author

Kristy L. De Vos, Employee Benefits Paralegal, Varnum,
Paralegal

Kristy focuses her Employee Benefits practice on retirement plans. In addition to drafting plans, she submits plans to IRS for opinion and determination letters, and submits plans to IRS under the Voluntary Compliance Program and to the U.S. Department of Labor under the Voluntary Fiduciary Correction Program.

Her experience also includes drafting plan amendments, consent resolutions, Summary Plan Descriptions, Summaries of Material Modifications, 204(h) Notices, and plan administrative forms. Kristy answers client questions about plan administration and assists...

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