The IRS has announced contribution and benefit limits for 2021.
The limit on contributions by employees who participate in 401(k)s, 403(b)s, most 457 plans and the federal government’s Thrift Savings Plan remains unchanged at $19,500.
The catch-up contribution limit for employees age 50 and older who participate in these plans remains unchanged at $6,500.
The limitation regarding SIMPLE [savings incentive match plan for employees] retirement accounts remains unchanged at $13,500.
The limit on annual contributions to an individual retirement account (IRA) remains unchanged at $6,000. The additional catch-up contribution limit for individuals age 50 and older is not subject to an annual cost-of-living adjustment (COLA) and remains $1,000.
Effective January 1, the limitation on the annual benefit under a defined benefit (DB) plan under Section 415(b)(1)(A) remains unchanged at $230,000. For a participant who separated from service before January 1, the participant’s limitation under a DB plan under Section 415(b)(1)(B) is computed by multiplying the participant’s compensation limitation, as adjusted through 2020, by 1.0122.
The limitation for defined contribution (DC) plans under Section 415(c)(1)(A) (annual additions) has been increased for 2021 to $58,000 from $57,000.
The limitation used in the definition of “highly compensated employee” under Section 414(q)(1)(B) remains unchanged at $130,000.
Details on these and other retirement-related cost-of-living adjustments for 2021 are in Notice 2020-79.