Each year, the IRS sets limits for pension plans. These limits are reviewed annually and adjusted for inflation. The following are some important limits in effect for 2020:
- Maximum compensation for plan purposes is $285,000
- Maximum monthly benefit for defined benefit plans ages 62 to 65 is the lesser of 100% of compensation or $19,166.67 with an annual benefit $230,000
- Highly Compensated Employee compensation $130,000+
- Maximum Defined Contribution / Profit Sharing Contribution $57,000
- Maximum SEP Contribution $57,000
- Maximum 401(k) Contribution $19,500. Catch-up Contribution for age 50 and over $6,500
- Maximum SIMPLE Contribution $13,500
Click here for a PDF copy of the 2020 limits.
