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New Retirement Plan Contribution Limits for 2021

January 28, 2021

401k contribution limits have changed for this Year. Take a look at some adjustments to the phase-out ranges and contribution limits for 2021.

The Internal Revenue Service has issued their annual cost of living adjustments for 401(k) and IRAs, Pension Plans, and other retirement related matters. What has changed for 2021? We share the new limits below.

The limits

Individual Retirement Account (Roth and Traditional)

Contribution Limits202120202019
IRA Contribution Limit$6,000$6,000$6,000
IRA Catch-Up Contributions$1,000$1,000$1,000

401(k), 457 and 403(b)

Contribution Limits202120202019
401(k), 457 and 403(b) maximum annual elective deferral limit$19,500$19,500$19,000
401(k), 457 and 403(b) catch up contribution limit for those 50 and over$6,500$6,500$6,000

You can make contributions up to the IRS contribution limits noted above or up to $290,000 in 2021—here’s how that number has changed through the years.

Annual Compensation$290,000$285,000$280,000

SIMPLE- Savings Incentive Match Plan for Employees

Contribution Limits202120202019
SIMPLE employee deferrals$13,500$13,500$13,000
SIMPLE catch-up deferrals$3,000$3,000$3,000

Simplified Employee Pension (SEP IRA)

Contribution Limits202120202019
SEP annual compensation limit$290,000$285,000$280,000
SEP minimum compensation$650$600$600
SEP maximum contribution$58,000$57,000$56,000

Phase-out ranges for 2021:

Traditional IRA MAGI Limits202120202019
Married filing jointly; a spouse who participates in an employer-sponsored plan$105,000- $125,000$104,000-$124,000$103,000-$123,000
Married filing jointly; a spouse who does not participate in an employer sponsored plan$198,000- $208,000$196,000-$206,000$193,000-$203,000
Single or Head of Household$66,000- $76,000$65,000- $75,000$64,000-$74,000

For Roth IRAs, if your MAGI falls within the applicable range, you can make a partial contribution, but if it exceeds the top of the range, you are not allowed to make a contribution.

Roth IRA MAGI Limits202120202019
Married Filing Jointly$198,000-$208,000$196,000-$206,000$193,000-$203,000
Single or Head of Household

$125,000- $140,000

$124,000- $139,000$122,000-$137,000

What is the social security wage base for 2021?

Social Security Wage Base$142,800$137,700$132,900

Interested in learning more about tax-advantaged retirement saving?

Contact our Tax Team for more information.

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