2020 Cost-of-Living Adjustments for Qualified Retirement Plans

November 2019

The Internal Revenue Service (IRS) and the Social Security Administration (SSA) have each announced 2020 cost-of-living adjustments (COLA). The IRS adjustments increased annual compensation amounts and limits for elective deferrals as well as catch-up contribution limits for age 50+ employees, but other catch-up contribution limits remain unchanged. Those receiving Social Security and Supplemental Security Income benefits will receive a 1.6 percent increase in benefits effective January 2020. The SSA also announced an increase in the taxable wage base (that is, the maximum amount of earnings subject to Social Security tax) for 2020. The table below highlights selected IRS COLA amounts for 2020 and prior years as well as the SSA taxable wage base amounts for similar periods.