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2021 Contribution Limits for Company-Sponsored Retirement Plans

October 27, 2020

The IRS has released new guidelines for the 2021 Contribution Limits for company-sponsored retirement plans and they’ve increased! If you’re not sure what they are, Leading Retirement Solutions has you covered.

Retirement Plan Maximum Contributions:

IRS guidelines detail the maximum income that an employee (including company owners) may contribute to a company-sponsored retirement plan as well as the maximum contributions an employee (including company owners) may receive from the business.

Contribution Highlights for 2021:

  • $58,000  -  The total employee + employer contribution that can be made to a 401(k), 403(b), most 457 plans and the federal government’s Thrift Savings Plan under Section 415(c)(1)(A).
  • $290,000  -  The amount of your compensation that can be taken into account when determining employer and employee Contributions.
  • $1,165,000  -  The maximum account balance allowed in an employee stock ownership plan (ESOP).
  • $142,800  -  The limit on the amount of your earnings that is taxed by Social Security.

 

 

2021

2020

2019

401(k), 403(b), Profit-Sharing Plans, etc.

Annual Compensation for Contributions

290,000

285,000

280,000

Elective Deferrals

19,500

19,500

19,000

Catch-up Contributions

6,500

6,500

6,000

Defined Contribution Limits

58,000

57,000

56,000

ESOP Limits

1,165,000/230,000  

1,150,000/230,000  

1,130,000/225,000  

Other

HCE Threshold

130,000

130,000

125,000

Defined Benefit Limits

230,000

230,000

225,000

Key Employee

185,000

185,000

180,000

457 Elective Deferrals

19,500

19,500

19,000

Control Employee (board member or officer)   

115,000

115,000

110,000

Control Employee (compensation-based)

230,000

230,000

225,000

Taxable Wage Base

142,800

137,700

132,900

IRAs

IRA Contribution Limit

$6,000

$6,000

$6,000

IRA Catch-Up Contributions

1,000

1,000

1,000

Traditional IRA AGI Deduction Phase-out Starting at

Joint Return

105,000

104,000

103,000

Single or Head of Household

66,000

65,000

64,000

SEP IRA

SEP Minimum Compensation

650

600

600

SEP Maximum Contribution

58,000

57,000

56,000

SEP Maximum Compensation

290,000

285,000

280,000

SIMPLE IRA

SIMPLE Maximum Contributions 

13,500

13,500

13,000

Catch-up Contributions

3,000

3,000

3,000

Additional information can be found on the IRS website.

For more tips and information regarding retirement plans, contact us.

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