Mercer has projected 2020 limits for individual retirement accounts (IRAs) and the saver’s credit. These unofficial 2020 limits are determined using the Internal Revenue Code’s cost-of-living adjustment methods, chained Consumer Price Index for All Urban Consumers (chained CPI) values through July and Mercer’s projected chained CPI for August. IRS is expected to announce official 2020 limits for these benefits in October, along with final 2020 limits for qualified retirement plans.
Maximum 2020 deductions for traditional IRA contributions are projected to remain at 2019 levels. Adjusted gross income (AGI) phase-out thresholds for Roth IRA contributions and a qualified plan participant’s deductible traditional IRA contributions are projected to increase slightly in 2020. The catch-up contribution limit and AGI thresholds for married taxpayers filing separately aren’t annually adjusted.
AGI levels at which employee contributions to a qualified retirement plan or an IRA qualify for a 50% or 20% saver’s credit are all expected to increase slightly in 2020. However, AGI thresholds for the 10% credit are too close to call.