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.
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