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Maximum Benefits and Contributions Limits

The Internal Revenue Service (IRS) has set the maximum benefits and contribution limits for the tax year 2021. More information about what has changed for 2021 can be found at the IRS website –Retirement Topics – 401(k) and Profit-Sharing Plan Contribution Limits

Advisors and Human Resource (HR) professionals should convey to employees their plan contribution limits and encourage those who can defer extra dollars for retirement savings to do so. While not all plan participants will be able to fund their 401(k) accounts up to the maximum, the contribution cap is a goal they should keep in mind.

Contribution Limits

2021 Maximum Benefits & Contributions Limits Chart

Limit/Contribution 2021 2020 2019
Defined Benefit - 415 Limit $230,000 $230,000 $225,000
Definied Contribution - 415 Limit $58,000 $57,000 $56,000
Compensation $290,000 $285,000 $280,000
Key Employee Dollar Limit (top-heavy plans) $185,000 $185,000 $180,000
Highly Compensated Employee Limit $130,000 $130,000 $125,000
Social Security Taxable Wage Base $142,800 $137,700 $132,900
Limit/Contribution 2021 2020 2019
401(k), 403(b), and 457(b) (Governmental and Non-governmental) Elective Deferral Limit $19,500 $19,500 $19,000
401(k), 403(b), and 457(b) Governmental* Catch-up Contribution Limit $6,500 $6,500 $6,000
SIMPLE Defferal Limit $13,500 $13,500 $13,000
SIMPLE Catch-up Contribution Limit $3,000 $3,000
SEP Contribution (Up to 25% of Compensation) $58,000 $57,000
IRA/Roth Limit 2021 2020 2019
Maximum Contribution Limit $6,000 $6,000
Catch-up Contribution Limit $1,000 $1,000
Deductibility of IRA Contribution (phaseouts) 2021 2020 2019
Covered by Retirement Plan
Single $66,000-$76,000** $65,000-$75,000**
Married Filing Jointly (MFJ) $105,000-$125,000** $104,000-$124,000**
Not Covered by Retirement Plan
Single or MFJ Unlimited Unlimited
Married Filing Jointly (MFJ) $198,000-$208,000** $196,000-$206,000**
Roth Contribution Eligibility 2021 2020 2019
Single $125,000-$140,000** $124,000-$139,000**
MFJ $198,000-$208,000** $196,000-$206,000**
Filing Separately $0-$10,000** $0-$10,000**

*  Catch-up contributions are not allowed on non-governmental 457(b) plans.
** Modified adjusted gross income.

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