The Internal Revenue Service has announced the cost of living adjusted dollar limits applicable to benefit plans for 2021 (see IRS Notice 2020-79). The key limits are listed below:
|
2021 Limit
|
2020 Limit |
401(k)/403(b)/457 Plan Maximum Elective Deferral
|
$19,500
|
$19,500
|
401(k)/403(b)/457 Catch-Up
|
$6,500
|
$6,500
|
Defined Contribution Maximum Annual Addition
|
$58,000
|
$57,000
|
Defined Benefit Maximum Annual Pension
|
$230,000
|
$230,000
|
Qualified Plan Maximum Compensation Limit
|
$290,000
|
$285,000
|
Highly Compensated Employee
|
$130,000
|
$130,000
|
IRA Contribution Limit
|
$6,000
|
$6,000
|
IRA Catch-Up Contributions
|
$1,000
|
$1,000
|
SIMPLE Limit
|
$13,500
|
$13,500
|
SIMPLE Catch-Up
|
$3,000
|
$3,000
|
In addition, the Social Security taxable wage base will increase from $137,700 for 2020 to $142,800 for 2021.