Every new year is an opportunity to reflect on the past, plan for the coming year, and look forward to the future. There is no question we are stepping into 2021 with an eye towards hope and good things to come.
Those good things to come, whether in 2021, or fifteen, or even thirty years from now, include retirement. No matter your time horizon, making healthy decisions each year to maximize your income in retirement is always a great New Year’s Resolution.
The maximum IRS retirement plan contributions limits have been announced for 2021. We encourage you to maximize your contributions now to maximize your future plans.
2021 Retirement Plan & Account Limits
| Plan Limits | 2021 | 2020 |
|---|---|---|
| 401(k) Elective Deferral Limit | $19,500 | $19,500 |
| Catch-Up Contribution Limit | $6,500 | $6,500 |
| Annual Defined Contribution Limit | $58,000 | $57,000 |
| Annual Compensation Limit | $290,000 | $285,000 |
| Annual Defined Benefit Limit | $230,000 | $230,000 |
| Highly Compensated Employee Dollar Limit | $130,000 | $130,000 |
| Key Employee Dollar Limit | $185,000 | $185,000 |
| 403(b)/457 Elective Deferral Limit | $19,500 | $19,500 |
| SIMPLE Employee Deferral Limit | $13,500 | $13,500 |
| SIMPLE Catch-Up Limit | $3,000 | $3,000 |
| SEP Minimum Compensation Limit | $650 | $650 |
| SEP Annual Compensation Limit | $290,000 | $285,000 |
| IRA Contribution Limit | $6,000 | $6,000 |
| IRA Catch-Up Contribution Limit | $1,000 | $1,0000 |
2021 Related Limits
| 2021 | 2020 | |
|---|---|---|
| Social Security Taxable Wage Base | $142,800 | $137,700 |
| Self-Only HSA Contribution Limit | $3,600 | $3,550 |
| Family HSA Contribution Limit | $7,200 | $7,100 |
| HSA Catch-Up Contribution Limit | $1,000 | $1,000 |
Greenwood Capital is an SEC registered investment advisory firm. This material has been prepared for information purposes only, and is not intended to provide, and should not be relied on solely for tax, legal or accounting advice.
