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davidlerner.com > Financial Literacy  > 2020 by the Numbers

2020 by the Numbers

2020 ushered in a few changes that could influence your finances. Increases in the amount you receive from SSA, as well as new retirement saving plan limits, both mean you could be better off this year than last. Make sure you know what changes affect you and how they will impact your life and finances. 

Retirement Savings Plan Limits 

The new retirement savings plan limits mean that if you’re under the age of 50, you can now put away up to $19,500 in a 401(k) plan. This year the rules also say that it’s okay to put up to $6,000 in an individual retirement account.

This is good news. It was $18,500 in 2018, and it’s gone up by $500 each year since then. The limit for individual retirement accounts remains unchanged at $6,000, with a $1,000 catch-up limit if you’re 50 or older.

Social Security Cost-of-Living Adjustment

If you’re getting checks from Social Security, your monthly windfall will be 1.6 percent bigger starting in January, thanks to a cost-of-living adjustment. That number is a fair bit less than what retirees got in recent years. Last year they got a 2.8 percent increase. While that may seem like a small amount compared to past years, it’s actually a boon when you take into account the fact that retirees saw a zero percent increase in 2010, 2011, and 2016.

As we move into the new decade, it’s important to take note of what changes are being made each year, so that you can stay abreast of your real-life circumstances. It could have an impact on your ability to predict your monthly as well as annual financial wellbeing.

Setting up an alert on Google or an email alert for any changes the Social Security Administration may make or when the government makes adjustments to any retirement rules or regulations is a good idea. That way you are never in the dark as to what’s going on and can make educated choices in the future. 

 

 

IMPORTANT DISCLOSURES

Material contained in this article is provided for information purposes only and is not intended to be used in connection with the evaluation of any investments offered by David Lerner Associates, Inc. This material does not constitute an offer or recommendation to buy or sell securities and should not be considered in connection with the purchase or sale of securities.

To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law. 

Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances.

These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable– we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice.

David Lerner Associates does not provide tax or legal advice. The information presented here is not specific to any individual's personal circumstances. Member FINRA & SIPC

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