The IRS has recently released the 2020 retirement plan contribution limits. For super-savers at Marathon Oil, things are looking up. Marathon Oil employees can now contribute $19,500 (or $26,000 for those over 50 years old) of pre-tax or Roth savings to the Marathon Oil Thrift Plan and can get $70,500 of retirement savings into tax-efficient vessels in 2020.
How Marathon Oil Employees Can Maximize Their Retirement Plan Contributions
It’s important to ensure that you are contributing at least 7% of your pay to receive the full 7% company match. At Marathon Oil, it is easy to miss the opportunity to receive the company contributions, so make sure you do the math every year!
2020 Annual Compensation Limits and Strategic Saving for Marathon Oil Employees
The annual compensation limit for 2020 has increased from $280,000 to $285,000. If you make more than $285,000 in base and bonus compensation for 2020, remember to ensure you max out your Marathon Oil Thrift Plan 401(k) contributions prior to earning $285,000 of income. After you earn $285,000 of income, you can no longer contribute to the 401(k).
Many Marathon Oil employees will be able to take advantage of the backdoor Roth saving strategy. With the IRA contribution limits staying at $6,000 (and $7,000 if over age 50), it means super-savers at Marathon Oil can put away up to $43,050 (or $55,050 if over age 50) between the Marathon 401(k) and backdoor Roths into tax-preferred retirement accounts. It’s important to keep in mind that these are the maximum numbers and are subject to the income limits outlined in the Marathon Oil Thrift Plan. The 2020 limit adjustments will be advantageous for super-savers at Marathon Oil and it is important to be sure that you make the most of these changes.
At Willis Johnson & Associates, we work with our clients to ensure they get the full 7% company match, take advantage of backdoor Roth IRAs to ensure they are on track for success, and facilitate after-tax roll-outs from the 401(k) to get the maximum amount of savings. If you have any questions about the 2020 contribution and compensation limits, please contact your advisor, or schedule a free consultation with one of our Marathon Oil specialists.