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2021 Retirement Plan Contribution Limits

Dylan Telerski / 26 Oct 2020 / 401(k) Resources, IRA Resources, Retirement News

Curious how much you can invest toward your retirement in 2021?

Download the Ubiquity Retirement + Savings 2021 Contribution Guide

The IRS has announced the 2021 contribution limits for retirement and health savings accounts. This includes contribution limits for 401(k) and 403(b) plans, income limits for IRA contribution deductibility, and the salary threshold to classify “key” and “highly compensated employees”

While contribution limits won’t increase from 2020 to 2021, there is still some good news for retirement savers. The maximum income levels allowed to make deductible contributions to traditional IRAs and to contribute to Roth IRAs, have both increased for 2021.

Let’s take a look at the updated limits below:

2021 401(k) and 403(b) individual contribution limits (IRS 402(g) Limit)

Age 49 and under

$19,500

Age 50 and older

Additional $6,500

The IRS has also set limits for the total amount that may be contributed to your retirement savings 401(k) account from all sources combined (IRS section 415 limit). This includes any employer matching or profit-sharing contributions, and any employee after-tax contributions. For 2021, this limit has increased from $57,000 to a new maximum of $58,000.

Every plan is different, so it’s important to refer to your Plan Document for any compensation or other applicable limits.

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2021 Highly Compensated and Key Employee definitions and limits

Key Employee Officer Compensation

$185,000

Highly Compensated Employee

$130,000

Annual Compensation Limit

$290,000

2021 Roth and Traditional IRA contribution limits

Age 49 and under

Up to $6,000 (must have earned income)

Age 50 and older

Additional $1,000

2021 Traditional IRA modified adjusted gross income limit for partial deductibility

Single

$66,000-$76,000

Married – Filing joint returns

$105,000-$125,000

Married – Filing separately

$0-$10,000

Non-active participant spouse

$198,000-$208,000

2021 Roth IRA modified adjusted gross income phase-out ranges

Single

125,000-$140,000

Married – Filing joint returns

$198,000-$208,000

Married – Filing separately

$0-$10,000

2021 Simple IRA contribution limits

Age 49 and under

$13,500

Age 50 and older

$16,500

2021 Health Savings Accounts (HSA) contribution limits

Individual (employer + employee)

$3,600

Family (employer + employee)

$7,200

Age 55 or older**

Additional $1,000

**Catch-up contributions can be made at any time during the year in which the HSA participant turns 55.

If you need more detailed guidance, see IRS Notice 2020-79.

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San Francisco, CA 94104
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© 2020 Ubiquity Retirement + Savings
Privacy Policy
44 Montgomery Street, Suite 3060
San Francisco, CA 94104
Support: 855.401.4357

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