Employee Benefit Plan Limits for 2020
Findley is pleased to provide you the following 2020 limits (and comparable 2019 figures) for various employee benefit plans and Social Security.
Employee Benefit Plans | 2019 | 2020 |
401(k) elective deferral dollar limit | $ 19,000 | $ 19,500 |
403(b) elective deferral dollar limit 1 | $ 19,000 | $ 19,500 |
457 eligible plan maximum deferral limit | $ 19,000 | $ 19,500 |
401(k), 403(b), state and local government 457, and 408(p) catch-up elective deferral (must be at least age 50) | $ 6,000 | $ 6,500 |
Defined benefit plans – maximum annual benefit | $ 225,000 | $ 230,000 |
Defined contribution plans – maximum annual addition | $ 56,000 | $ 57,000 |
Annual compensation limit | $ 280,000 | $ 285,000 |
Highly compensated employee 2 | $ 125,000 | $ 130,000 |
SIMPLE retirement accounts – maximum elective deferrals | $ 13,000 | $ 13,500 |
Key Employee | $ 180,000 | $ 185,000 |
Social Security | 2019 | 2020 |
Social Security taxable wage base 3 Exempt earnings under the Social Security earnings test | $ 132,900 | $ 137,700 |
Under Social Security retirement age (SSRA) 4,5 | $ 17,640 | $ 18,240 |
Year in which SSRA is attained (per month) 6 | $ 3,910 | $ 4,050 |
SSRA and older | all | all |
1 May be increased by as much as $3,000 in certain situations.
2 Compensation threshold used to determine next year’s HCEs.
3 Employers and employees each pay 6.2% Social Security tax on earnings up to this level. All earnings are subject to an additional 1.45% Medicare tax, which is also paid by both employers and employees. Medicare tax rate increases by .9% if the taxpayer’s AGI exceeds: $250,000 if filing a joint return; $125,000 if married filing separately, and $200,000 for any other filing status.
4 SSRA for those born 1943 through 1954 is 66. SSRA increases to age 67 for those with later birth years.
5 In general, $1 of the Social Security benefit is lost for each $2 of earnings over threshold before the year SSRA is attained.
6 In the year SSRA is attained, $1 of the Social Security benefit is lost for each $3 of earnings over the threshold during the months before the individual’s SSRA occurs.
Part D Standard Benefit | 2019 | 2020 |
Deductible | $ 415 | $ 435 |
Initial Coverage Limit | $ 3,820 | $ 4,020 |
Maximum out-of-pocket threshold | $ 5,100 | $ 6,350 |
Spending before catastrophic coverage | $ 7,653.75 | $ 9,038.75 |
Retiree drug subsidy (RD) amounts Cost threshold Cost limit | $ 415 | $ 435 |
Health Savings Accounts | 2019 | 2020 |
Minimum deductible to be a qualified high deductible health plan Self-only coverage Family coverage | $ 1,350 $ 2,700 | $ 1,400 $ 2,800 |
Maximum annual HSA contribution (excluding catch-up contribution) Self-only coverage Family coverage | $ 3,500 $ 7,000 | $ 3,550 $ 7,100 |
Annual catch-up contribution for individuals age55 or older (per person) | $ 1,000 | $ 1,000 |
Out-of-pocket maximums Self-only coverage Family coverage | $ 6,750 $ 13,500 | $ 6,900 $ 13,800 |
Posted November 6, 2019
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Category: Findley Post, Retirement Plans, Health and Group Benefits