by Tammy Repaso, JD (

People who are saving for retirement—a group that we hope includes all of our clients at AEGIS Law—are having an interesting early 2020. Changes to the law and to IRS rules have made some substantial changes to the rules for retirement savings accounts.

Most of those changes are good news for working Americans—but to take advantage, you must know what those changes are and how they affect you. Clients and potential clients with questions are always welcome to contact our retirement planning attorneys, but here’s a brief rundown of the changes that are most likely to affect you.

IRS Retirement Savings Limits

As people get close to retirement age, they tend to accelerate their savings—especially if they need to make up a deficit from their younger, leaner years. If you’re in that category, you’re in luck: The Internal Revenue Service has raised the maximum contribution to 401(k)s, 403(b)s, Thrift Savings Plans, SIMPLE retirement accounts, and many 457 plans by $500. The limit for SIMPLE plans is $13,500 for 2020; the limit for the other plans is $19,500. If you’re age 50 or older and eligible to make catch-up contributions, you can make an additional contribution of up to $6,500.

In addition to this, the IRS has increased the income limits for deducting contributions to traditional IRAs or Roth IRAs, and for claiming the Saver’s Credit. The numbers depend on your retirement savings situation and your tax filing status, but for example, a single taxpayer who is also part of a workplace retirement plan would be eligible to deduct the full amount contributions to an IRA if she makes $65,000 or less in 2020. The deduction would be reduced until being cut off at an income level of $75,000 or higher. The IRS website has more details.

Changes to Federal Benefits Programs

The annual cost of living adjustment to Social Security will rise by 1.6% in 2020. According to CNBC, this would provide a married couple where both spouses are receiving benefits with an extra $40 a month, rising from $2491 to $2531.

Unfortunately, seniors who use Medicare will see their premiums rise $9.10 a month, and that’s for the lowest income group. Single Medicare users who have more than $87,000 in income, and married filing jointly Medicare users who have more than $174,000 in income, will pay more.

Changes to the Law

The most important change to retirement planning law in 2020 is the Setting Every Community Up for Retirement Enhancement Act, also known as the SECURE Act. The law is intended to encourage more retirement savings among working Americans. To achieve that, it permits part-time employees to sign up for employer-sponsored retirement plans; permits older workers to keep paying into traditional IRAs as long as they’re still working; and encourages savers and employers to consider annuities.

The law also requires people who have inherited an IRA or 401(k) from someone other than their spouse to take disbursements from the account over no more than 10 years, whereas previously disbursements could have taken over a person’s life expectancy. This is among many other provisions of the SECURE Act, so if you believe you’re affected, it’s worth talking to a retirement planning attorney.

If you’d like to talk to a knowledgeable retirement planning attorney about your situation and your options, call AEGIS Law today. You can reach us through our website or call (314) 454-9100.