The IRS (Internal Revenue Service) announced the cost of living adjustments to pension and 401k retirement plans for the upcoming tax year of 2020. These adjustments are carried out by the Commisioner under Section 415 of the Internal Revenue Code. The 401k max contributions for the tax year 2020 and previous years is detailed below:
| 2020 | 2019 | 2018 | 2017 | 2016 | 2015 | |
| Max 401k Contributions | $19,500 | $19,000 | $18,500 | $18,000 | $18,000 | $18,000 |
| Defined Annual Contribution Limits | $57,000 | $56,000 | $55,000 | $54,000 | $53,000 | $53,000 |
| Maximum Allowable Annual Compensation | $285,000 | $280,000 | $275,000 | $270,000 | $265,000 | $265,000 |
| 401K Catch Up Contributions | $6500 | $6000 | $6000 | $6000 | $6000 | $6000 |
Contribution Limits for Other Retirement Plans
| 2020 | 2019 | 2018 | 2017 | 2016 | 2015 | |
| 403b Plans / 457 Plans | $19,500 | $19,000 | $18,500 | $18,000 | $18,000 | $18,000 |
| Simple Employee Deferral | $13,500 | $13,000 | $12,500 | $12,500 | $12,500 | $12,500 |
| SEP Minimum Compensation | $600 | $600 | $600 | $600 | $600 | $600 |
| Maximum Allowable SEP Compensation | $285,000 | $280,000 | $275,000 | $270,000 | $265,000 | $265,000 |
Become a Millionaire with your 401k Retirement Plan
In the year 2004, the average household savings in USA averaged 0.8% of disposable income (income after all your expenses have been paid off). This rate has been the lowest since the Great Depression and the past 3 decades have seen savings rates of over 7%. Why is this 0.8% rate so low? Is it because Americans are just bad at saving money, or too much of our disposable income is going towards paying off our homes? In order to reach your goal of having $1 million upon retirement, here are a few suggestions: (Read Full)
Sticking with your 401k Retirement Account Pays Off Long Term, study reveals
A study carried out by 2 Washington DC state organizations revealed that 401k participants who contributed payments towards their employer sponsored 401k retirement plans over the past 7 years have seen growth rates of over 50%. This is inspite of the tech boom bust of 2000 and market declines in 2002.. (Read Full)