The Internal Revenue Service announced some very important number companies and employees need to know about health savings accounts, 401(k)s and flexible spending accounts. Note: All of the changes take place in January 2020.
401(k) Pre Tax Limit Increases – Pre-tax contribution limits for employees who participate in a 401(k), 403(b) and most 457 plans increases to $19,500.
401(k) Catch-up Contribution – 50 and over, the additional 401(k) catch-up contribution limit, which is set by law, will stay at $6,500 up $500 from 2019.
IRA Contributions – IRA contribution limits remain $6,000
HSA contributions (Individual) – The Health Savings Account annual limit for individuals is increased to $3,550
HSA Contributions (Family) – The Health Savings Account limit for families is increased to $7,100
HSA Catch-up Contributions – Unchanged from last year, 55 and older can contribute an extra $1,000 to their health savings account in 2020. (Source)
FSA – The health flexible spending account contribution limit for 2020 is $2,750
These are just some of the numbers which employers and employees should know for 2020.
Disclaimer: The above should only be considered general information. Always consult with your benefits broker, a tax or financial professional and/or the internal revenue service to determine current laws and legal obligations.
Sources: Employee Benefit Adviser, Article by Kathryn Mayer; IRS.gov