The Internal Revenue Service has announced the 2020 contribution limits for the Thrift Savings Plan and for Individual Retirement Arrangements. The amount federal employees can save in their TSP accounts is increasing next year.
2020 TSP Contribution Limits
The annual contribution limit in 2020 for the TSP will be $19,500, up from $19,000 in 2019, a 2.6% increase. This limit also applies to 401(k), 403(b), and most 457 plans.
The catch-up contribution limit for employees aged 50 and over who participate in these plans is increased from $6,000 to $6,500.
2020 IRA Contribution Limits
The contribution limit for Individual Retirement Arrangements (IRA) remains unchanged at $6,000. In 2019, it increased to this amount, up from $5,500 in 2018.
The additional catch-up contribution limit on IRAs for individuals aged 50 and over is not subject to an annual cost-of-living adjustment and remains $1,000.
IRA Income Limits
The income ranges for determining eligibility to make deductible contributions to traditional and Roth IRAs all increased for 2020.
Taxpayers can deduct contributions to a traditional IRA if they meet certain conditions. If during the year either the taxpayer or his or her spouse was covered by a retirement plan at work, the deduction may be reduced, or phased out, until it is eliminated, depending on filing status and income. (If neither the taxpayer nor his or her spouse is covered by a retirement plan at work, the phase-outs of the deduction do not apply.) Here are the phase-out ranges for 2020:
- For single taxpayers covered by a workplace retirement plan, the phase-out range is $65,000 to $75,000, up from $64,000 to $74,000.
- For married couples filing jointly, where the spouse making the IRA contribution is covered by a workplace retirement plan, the phase-out range is $104,000 to $124,000, up from $103,000 to $123,000.
- For an IRA contributor who is not covered by a workplace retirement plan and is married to someone who is covered, the deduction is phased out if the couple’s income is between $196,000 and $206,000, up from $193,000 and $203,000.
- For a married individual filing a separate return who is covered by a workplace retirement plan, the phase-out range is not subject to an annual cost-of-living adjustment and remains $0 to $10,000.
The income phase-out range for taxpayers making contributions to a Roth IRA is $124,000 to $139,000 for singles and heads of household, up from $122,000 to $137,000.
For married couples filing jointly, the income phase-out range is $196,000 to $206,000, up from $193,000 to $203,000. The phase-out range for a married individual filing a separate return who makes contributions to a Roth IRA is not subject to an annual cost-of-living adjustment and remains $0 to $10,000.