Retirement Savings, Social Security, and Medicare: Changes 2020
When the clock strikes midnight on Dec. 31, it will not only usher in a new decade. It will also bring in a host of retirement changes.
And that could have big implications for your money.
Meanwhile, individuals who are already in retirement could see a slight bump to their Social Security benefits. On the other hand, they also need to be prepared for potentially higher Medicare costs.
Here’s a breakdown of what’s coming.
Next year, you will be able to save as much as $19,500 in your 401(k) plan and up to $6,000 in your individual retirement account.
Savers who are age 50 and over will be eligible to put away up to $6,500 more in their 401(k) plans and another $1,000 in their IRAs.
What’s more, recent legislation passed by Congress will make it possible for you to still save in your IRA past age 70½. With that change, there is no age cap on making those IRA contributions, so long as you have earned income.
Workers who have access to a retirement plan such as a 401(k) through a current employer can also continue to save money towards retirement regardless of their age.
The chart below shows how those limits have changed since last year.