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2021 Retirement Plan and Tax Changes

January 05, 2021

Retirement Plan Contribution Limits for 2021

For 2021 there are no changes to the amount allowed to be saved in 401(k)s, 403(b)s, most 457 plans, and the federal government's Thrift Savings Plan. Investors can contribute up to $19,500 to those plans during the year. Additionally, the "catch-up" contribution limit for people age 50 and older remains unchanged in 2021 at $6,500, meaning people 50 and over can save a total of $26,000 in employer sponsored plans.

IRA Contribution Limits for 2021

Like employer sponsored retirement plans there was no change to the amounts that may be contributed to traditional or Roth IRAs in 2021. The limit on annual contributions to IRA account remains unchanged at $6,000. That's the same amount as it was for both 2019 and 2020. The additional IRA "catch-up" contribution for people 50 and over is not subject to an annual cost-of-living adjustment and stays at $1,000, too (for a total contribution limit of $7,000 for IRA savers age 50 and older).

Deductibility Income Limits and Phase-out Ranges for IRA Contributions

For 2021 the income limit for tradition IRA deductibility has been slightly increased across all filing statuses.  For example, a married couple filing jointly and covered by an employer sponsored plan is able to make a deductible contribution at income at $105,000, up from $104,000 in 2020.

For ROTH IRA contributions the income limit phase out for a married couple begins at $198,000, up from $196,000 in 2020. 

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2021 Retirement Plans, Estate and Gift Tax Guide

2021 Limits for Traditional IRAs, Roth IRAs, Employer Retirement Accounts and ESAs