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Posted by Bernard Kaplan on Thu, Oct 29, 2020 @ 02:37 PM

RetirementThe IRS has announced the 2021 cost-of-living adjustments applicable to dollar limitations for retirement plans and other items. Most dollar limits remain unchanged for 2021.

Retirement plans are subject to annually adjusted dollar limitations by the IRS for cost-of-living increases, and are normally determined based on inflation data provided by the Bureau of Labor Statistics’ release of the Consumer Price Index. Effective January 1, 2021, the following limitations apply (comparison to previous years also shown):

401(k) Plan Limits

2021

2020

2019

2018

2017

401(k) Elective Deferrals

$19,500

$19,500

$19,000

$18,500

$18,000

Catch-Up Contribution Limit

$6,500

$6,500

$6,000

$6,000

$6,000

Annual Defined Contribution Limit

$58,000

$57,000

$56,000

$55,000

$54,000

Annual Compensation Limit

$290,000

$285,000

$280,000

$275,000

$270,000

Highly Compensated Employees

$130,000

$130,000

$125,000

$120,000

$120,000

Non 401(k) Related Limits

 

 

 

 

 

403(b) / 457 Elective Deferrals

$19,500

$19,500

$19,000

$18,500

$18,000

SIMPLE Employee Deferrals

$13,500

$13,500

$13,000

$12,500

$12,500

SIMPLE Catch-Up Deferral

$3,000

$3,000

$3,000

$3,000

$3,000

SEP Minimum Compensation

$650

$600

$600

$600

$600

SEP Annual Compensation Limit

$290,000

$285,000

$280,000

$275,000

$270,000

Defined Benefit Plan Limit

$230,000

$230,000

$225,000

$220,000

$215,000

Social Security Wage Base

$142,800

$137,700

$132,900

$128,400

$127,200

IRA Deductible Contribution Limit

$6,000

$6,000

$6,000

$5,500

$5,500

IRA Catch-Up Contribution Limit

$1,000

$1,000

$1,000

$1,000

$1,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For assistance or questions related to applying the 2021 benefit plan limitations, or any other retirement plan issues, please contact a member of your CBIZ & MHM client service team or you may also contact us here.

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KaplanBernie Kaplan is a Managing Director and Leader of the Retirement and Benefit Plan Services Group at CBIZ & MHM New England. He can be reached at 617.761.0541 or BKaplan@cbiz.com.

 

 

 

 

 

Tags: retirement plans, Bernard Kaplan, 403(b), 401(k), cost-of-living, 457 plan, 2021 retirement plan limitations

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