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
