2021 IRS Limits for Retirement Plans
The IRS places limits on how much you can contribute to various retirement and pension accounts. The Secretary of the Treasury annually adjusts these limits for cost-of-living increases. The new limits went into effect January 1, 2021. Here is a summary of some of the most common limits.
Item |
2021 |
2020 |
401(k)
/ 403(b) / 457 Elective Deferral Limit |
$19,500 |
$19,500 |
Defined Contribution Plan Annual Limit |
$58,000 |
$57,000 |
Defined
Benefit Plan Annual Limit |
$230,000 |
$230,000 |
Annual Compensation Limit |
$290,000 |
$285,000 |
Catch-Up
Contribution Limit 401(k) / 403(b) / 457(b) / SEP |
$6,500 |
$6,500 |
Highly Compensated Employee Compensation
Threshold |
$130,000 |
$130,000 |
Key
Employee Compensation Threshold |
$185,000 |
$185,000 |
Social Security Taxable Wage Base |
$142,800 |
$137,700 |
Schreiber Accounting and Advisory has published the 2021 Plan Sponsor’s Desk Reference, which is full of information relevant to professionals responsible for administering 401(k) and 403(b) defined contribution plans. Download the 2021 Plan Sponsor’s Desk Reference.
The rules and regulations concerning employee benefit plans are complex and constantly changing. Schreiber Accounting and Advisory offers plan audit services for 401(k) and 403(b) plans, as well as other types of employee benefit plans. Contact the firm for more information.
Material discussed is for informational purposes only. It is not to be interpreted as investment, tax, or legal advice. Individual situations vary, and this information should only be relied upon when coordinated with individual professional advice.