The Internal Revenue Service has announced the cost of living adjusted dollar limits applicable to benefit plans for 2021 (see IRS Notice 2020-79). The key limits are listed below:
|
2021 Limit |
2020 Limit | |
|
401(k)/403(b)/457 Plan Maximum Elective Deferral |
$19,500 |
$19,500 |
|
401(k)/403(b)/457 Catch-Up |
$6,500 |
$6,500 |
|
Defined Contribution Maximum Annual Addition |
$58,000 |
$57,000 |
|
Defined Benefit Maximum Annual Pension |
$230,000 |
$230,000 |
|
Qualified Plan Maximum Compensation Limit |
$290,000 |
$285,000 |
|
Highly Compensated Employee |
$130,000 |
$130,000 |
|
IRA Contribution Limit |
$6,000 |
$6,000 |
|
IRA Catch-Up Contributions |
$1,000 |
$1,000 |
|
SIMPLE Limit |
$13,500 |
$13,500 |
|
SIMPLE Catch-Up |
$3,000 |
$3,000 |
In addition, the Social Security taxable wage base will increase from $137,700 for 2020 to $142,800 for 2021.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.