Don't feel bad...
If you haven't been keeping up with all of the options for retirement savings, you're not alone. With limits that change every year, and an alphabet soup of retirement programs, it's not so easy.
If you are in "withdrawal mode", congrats to you! But if you are not, we put together a short "cheat sheet" of the most popular types of retirement plans and their 2020 limits.
Retirement Plan Facts for 2020
Traditional IRA -- Contribution to these accounts may be tax deductible, especially if you are not covered by an employer-sponsored retirement plan or if you are single. New for 2020 is a $6000 limit ($7000 if you're 50+.) Earnings are tax-deferred until withdrawn in retirement.
Roth IRA -- Roth contribution are after-tax and non-deductible. Earnings and principal are withdrawn tax-free at retirement. Contributions are limited for incomes over $196,000 (married, filing jointly), and can be up to $6000/$7000 (50+)
401k -- Contributions can be up to $19,500, not including your employer's contribution. (The employee limit is $26,000 for ages 50+.) You can make pretax or after tax contributions. Matching varies by employer.
SEP IRA and Solo(k) - These plans have a $57,000 contribution limit, including employer profit sharing and employee deferral (pretax.) They are perfect for solo business owners as these contributions are an employerexpense, lowering the firm's taxable income.
Be sure to consult your accountant about SEP and Solo(k) contribution levels that are appropriate for your specific situation. And talk to us about sustainable investment options. We're happy to answer your questions.
More ways to save -- 2020 Contribution Limits
November 19, 2019|