The IRS announced the 2020 401(k) contribution limits today. Employees will be able to contribute up to $19,500 next year, an increase of $500 from 2019. The catch-up contribution limit, for employees aged 50 and over, is also increased by $500, to $6,500 in 2020.
For more highlights of the 2020 changes and information regarding other retirement plan contribution limits, visit https://www.irs.gov/newsroom/401k-contribution-limit-increases-to-19500-for-2020-catch-up-limit-rises-to-6500?fbclid=IwAR1dEqiL9omX73UtHfdZQaneVNOYDeU8bOuYNSYOjfvx08T1iNKhzWAAjfg
You will want to include these new limits as part of any year-end benefit communication to your employees, and in time for them to make deferral changes effective 1/1/2020.
Workplace-based retirement savings plans, such as 401(k) plans, have risen in popularity over the years and are now a staple among employer benefit packages. And – they play a vital role in ensuring retirement income security for employees.
As with any benefit program, plan design, education and communication are key to encouraging participation and making the most of the benefit – for both employers and employees.
If Pfautz Consulting Group, LLC can help you evaluate your benefit package, or the effectiveness of any of your benefit programs, please contact us.