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.

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