Retirement Plans

The Right (or Wrong) Way to Retire

          January 8, 2021 – Featuring Connie Brezik Last year certainly had its challenges. For instance, your job or career may have been affected, perhaps requiring you to work from home, stop all your usual travel, and forcing you to learn new online technologies to keep in touch with your clients…

Saving too Much too Early in the Year can Hurt Your Retirement

          January 8, 2021 – Featuring Jeffrey Levine, Director of Advanced Planning at Buckingham Strategic Wealth When it comes to retirement planning and building up the proverbial nest-egg, there are few pieces of advice more universally accepted than “save as much as possible as early as possible.” Certainly, taking such action…

Retirement Plans – IRS Indexed Limits for 2021

The IRS indexed dollar limits to qualified retirement plans for 2021 are provided in the table below. This update is provided for informational purposes and not intended as legal advice.

Item IRC Reference 2021 Limit 2020 Limit
401(k) and 403(b) Employee Limit1 402(g)(1) $19,500 $19,500
457 Employee Deferral Limit 457(e)(15) $19,500 $19,500
Catch-up Contribution2 414(v)(2)(B)(i) $6,500 $6,500
Defined Contribution Dollar Limit (age 49 or younger) 415(c)(1)(A) $58,000 $57,000
Defined Benefit Dollar Limit 415(b)(1)(A) $230,000 $230,000
Compensation Limit for calculating contributions3 401(a)(17); 404(l) $290,000 $285,000
Highly Compensated Employee Income Limit4 414(q)(1)(B) $130,000 $130,000
Key Employee Officer 416(i)(1)(A)(i) $185,000 $185,000
Social Security Taxable Wage Base $142,800 $137,700

Individual Accounts – IRS Indexed Limits for 2021

Item IRC Reference 2021 Limit 2020 Limit
Limit on employee contributions to 401(k), 403(b), or 457 plan $19,500 $19,500
Limit on age 50+ catchup contributions to 401(k), 403(b), or 457 plan $6,500 $6,500
Traditional & Roth IRA contribution limits $6,000 $6,000
Traditional and Roth IRA age 50+ catchup contribution limit $1,000 $1,000

Individual Accounts – Deductibility Phase Out Limits for 2021

Item IRC Reference 2021 Limit 2020 Limit
Deductible IRA income limit, single active participant in workplace retirement plan $66,000
$76,000
$65,000
$75,000
Deductible IRA income limit, Married filing jointly
Active participant in workplace retirement plan
$105,000
$125,000
$104,000
$124,000
Deductible IRA income limit, spouse is active participant in workplace retirement plan or Roth $198,000
$208,000
$196,000
$206,000
Roth IRA income limit, single 408A(c)(3)(A) $125,000
$140,000
$124,000
$139,000
Roth IRA income limit, married filing jointly 408A(c)(3)(A) $198,000
$208,000
$196,000
$206,000
SIMPLE 401(k) or SIMPLE IRA contributions limit $13,500 $13,000
SIMPLE 401(k) or SIMPLE IRA age 50+ catchup contributions limit $3,000 $3,000

View previous year information here.

1 Employee deferrals to all 401(k) and 403(b) plans must be aggregated for purposes of this limit. A lower limit applies to SIMPLE plans.
2 Available to employees age 50 or older during the calendar year. A lower limit applies to SIMPLE plans
3 All compensation from a single employer must be aggregated for purposes of this limit.
4 For the 2021 plan year, an employee who earns more than $130,000 in 2020 is a HCE. For the 2022 plan year, an employee who earns more than $130,000 in 2021 is an HCE.