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Higher contribution limits in 2020 mean more retirement savings for you.

 

If you recently hit 50, you might have realized that your retirement savings is not quite where you want it. You’re not alone. Many people come to us for a financial plan worried that they don’t have enough retirement savings to keep the lifestyle they want in retirement. 

Luckily, the IRS seems to know this also and recently announced higher contribution limits for qualified retirement accounts. This can mean more retirement savings for you. Next year, the contribution limits for qualified retirement plans including 401(k)s and 403(b)s are increasing from $19,000 to $19,500If you are 50 or older, the catch-up contribution is also increasing by $500, from $6,000 to $6,500, so you can make a total contribution of $26,000 in pre-tax or Roth contributions. If you are turning 50, you are now eligible to boost retirement savings through catch-up contributions. You can make catch-up contributions at any time during the year that you turn 50 (you don’t have to wait until you actually turn 50). 

 

IRA contribution and catch-up limits are staying at the same levels for 2020, with $6,000 per person, plus an additional $1,000 catch-up contribution for people that are 50 and older. 

 

Are you on track for retirement?

Making sure you will be ready for retirement can be overwhelming. Funding your retirement accounts over the years is just one part of your journey to the retirement of your dreams. A Certified Financial PlannerTM can help you navigate the complexities of financial planning. Talk to a Financial Planner>

Health Savings Accounts

 

The contribution limits for Health Savings Accounts (HSA) are also increasing. Individuals can contribute $3,550 next year (up $50 from this year), and families can contribute $7,100 (a $100 increase). The catch-up contribution for those age 55 years and older remains at $1,000.

Business Owner Retirement Savings

The limit for SEP IRAs will be $57,000; since SEP IRAs are considered an employer plan, there is no catch-up contribution. SIMPLE IRA limits have increased by $500 from $13,000 to $13,500. The over-50 catch-up contribution remains at $3,000 for 2020, for a total contribution of $16,500.

Dream. Plan. Do.

Platt Wealth Management offers financial plans to answer your important financial questions. Where are you? Where do you want to be? How can you get there? Our four-step financial planning process is designed to be a road map to get you where you want to go while providing flexibility to adapt to changes along the route. We offer stand alone plans or full wealth management plans that include our investment management services. Give us a call today to set up a complimentary review. 619-255-9554.

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