The IRS has announced adjusted benefit plan limits for 2021. These adjustments reflect inflation, and are important for administrators of employee retirement and health plans.
The limit on 401(k) and 403(b) plan elective deferrals remains the same, at $19,500 for 2021, as does the limit on catch-up contributions, at $6,500. The limit on overall defined contribution plan contributions increases to $58,000, and the limit on the annual benefit under a defined benefit plan remains the same, at $230,000. The annual compensation limit for retirement plans increases to $290,000.
On the health plan side, the health FSA limits remain the same; the contribution limit for 2021 is $2,750 and the carryover limit is $550. The HSA contribution limits increase to $7,200 for family coverage and $3,600 for individual coverage.
A chart outlining key 2021 benefit plan limits is available below, or click here for a printable PDF version.
Key 2021 Benefit Plan Limits and Thresholds
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2021 limit
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2020 limit
|
|
Elective deferral limit for 401(k), 403(b), and 457 plans
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$19,500
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$19,500
|
|
Catch-up contribution limit for 401(k), 403(b), and 457 plans*
|
$6,500
|
$6,500
|
|
Defined contribution plan annual additions limit
|
$58,000
|
$57,000
|
|
Defined benefit plan limit on annual benefit
|
$230,000
|
$230,000
|
|
Retirement plan annual compensation limit
|
$290,000
|
$285,000
|
|
Compensation for definition of highly compensated employee
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$130,000
|
$130,000
|
|
Compensation for definition of key employee
|
$185,000
|
$185,000
|
|
SEP compensation threshold for participation
|
$650
|
$600
|
|
SEP contribution limit
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$58,000
|
$57,000
|
|
SIMPLE retirement account pre-tax contribution limit
|
$13,500
|
$13,500
|
|
SIMPLE retirement account catch-up contribution limit
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$3,000
|
$3,000
|
|
Health FSA limit (cafeteria plans)
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$2,750
|
$2,750
|
|
Health FSA carryover limit
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$550
|
$550
|
|
HSA contribution limit – family coverage
– single coverage
|
$7,200
$3,600
|
$7,100
$3,550
|
|
Social Security taxable wage base
|
$142,800
|
$137,700
|
* Other limits may apply depending on plan terms
