Good news for people who plan on adding to their 2020 retirement savings accounts: There are new limits – and they are increasing!
The U.S. Treasury Department has announced that 401(k) contribution limits are increasing, while traditional IRA contribution limits will remain the same. There are other increases for 2020 retirement savings accounts, too.
In 2019, you could contribute $19,000 to your 401(k) plan but this year, you can kick in $19,500. If you have a traditional IRA as a part of your retirement savings accounts, you can contribute $6,000 just like you could in 2019.
So, how much are you saving? Most experts say that you should start saving 10% of your earnings in your 20s. But if you cannot do that, make sure you are saving as much as your employer matches.
If even that seems impossible, save SOMETHING – and increase it as your income increases.
The common thinking is that you will need about 80% of the income you have at retirement to maintain your lifestyle, meaning your retirement savings accounts need to be fully funded. There is no guarantee that Social Security will be around – at least in its current state – especially for younger workers.
And who has a pension nowadays? Not many.
Your 2020 retirement savings accounts, aka personal savings, are your main source of retirement income.
Do you still have questions about your retirement savings accounts? We have some information on our website.
And for more retirement savings planning tips and ideas, follow us on LinkedIn and Facebook!
If you have other questions about retirement plan loans, email us or call 937.308.0758.
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