2020 Retirement Contribution Limits: 401(k), Roth IRA, Traditional IRA and More

Ready to save money for retirement? It’s helpful to be aware of current retirement contribution limits so you know how much cash you’re allowed to stash in different types of investment vehicles.

In this article, we’ll let let you know how much you’re allowed to put where in 2020.

The maximum retirement contribution limits for a variety of things like 401(k)s, Roth IRAs and more tend to go up over the years. Here’s how much you can save this year, broken down by category.

Here Are Your Retirement Contribution Limits for 2020

• 401(k) Limits
• IRA Limits
• Roth IRA Limits
• 403(b) Limits
• 457 Limits
• SEP Limits

Traditional 401(k) and Roth 401(k) Limits

A 401(k) offers you a tax break upfront through a payroll deduction today, but the money will be taxed down the road when you need it in retirement. Any matching contribution your employer makes does not count against your limit.

* If your plan permits, you can make catch-contributions of $6,500 (for a total of $26,000) beginning at age 50.

RELATED: Beware of Making This $300,000 Mistake With Your 401(k)

IRA Limits

Individual retirement accounts also give you a tax break upfront, with taxes deferred until you need to pull the money out down the road.

* Those who are 50 or older can make a catch-up contribution of an additional $1,000, for a total of $7,000.

Roth IRA Limits

Roth IRAs are different than traditional IRAs in their tax treatment. With a Roth, you contribute after-tax dollars today. But the money is not taxed again when you need it during retirement.

* Those who are 50 or older can make a catch-up contribution of an additional $1,000, for a total of $7,000.

RELATED: How to Open a Roth IRA

403(b) Limits

A 403(b) is a retirement plan for those who are employed by a public school system, hospital, home health service agency, health and welfare service agency or church.

* Catch-up contributions can by made by those who have 15 years on the job or are 50+. Limits vary based on circumstance. See IRS.gov for complete details.

RELATED: 4 Questions for Teachers to Ask About Their 403(b) Retirement Plans

457 Limits

A 457 is a retirement plan for governmental and certain non-governmental employers in the United States.

* Catch-up contributions can by made by those who have less than three years to normal retirement age left or are 50+. Limits vary based on circumstance. See IRS.gov for complete details.

SEP Limits

Simplified employee pension plans work like a traditional IRA or a 401(k), with a current year tax deduction, but withdrawals are taxed at retirement.

Final Thought

Retirement is one of those things that you can’t leave for another day. The time to save is today.

No one should put off saving for retirement until they’re 50 or 60 — or you risk not getting it done and having to work well past the age you want to work. Remember, the earlier you save money, the more time it has to grow!

Now that you know the retirement contribution limits for 2020, you can set you goals accordingly.

Meanwhile, if you have additional investing questions, give our Consumer Action Center a call:

Contact Clark’s Consumer Action Center — a FREE help line open Monday-Thursday from 10 a.m. – 7 p.m and Friday from 10 a.m. – 4 p.m. EST. We have volunteers available to answer YOUR concerns! Call Team Clark at 404-892-8227.

More Personal Finance Stories on Clark.com:

• Beware of Making This $300,000 Mistake With Your 401(k)
• The #1 Tip to Help Maximize Your 401(k) Investing
• Is a Roth 401(k) Better Than a Traditional 401(k)?