| | Retirement Planning
Employee/individual contribution
limits| Elective deferral
limits | 2020 | 2021 |
|---|
| 401(k) plans, 403(b) plans, 457(b)
plans, and SAR-SEPs 1 [Includes Roth 401(k) and Roth 403(b)
contributions] | Lesser of $19,500 or 100% of participant's compensation
| Lesser of $19,500 or 100% of participant's compensation
| | SIMPLE 401(k) plans and SIMPLE IRA
plans1 | Lesser of $13,500 or 100% of participant's compensation | Lesser of $13,500 or 100% of participant's compensation |
1 Must aggregate employee contributions to all 401(k),
403(b), SAR-SEP, and SIMPLE plans of all employers. 457(b) plan contributions
are not aggregated. For SAR-SEPs, the percentage limit is 25% of compensation
reduced by elective deferrals (effectively, a 20% maximum contribution). | IRA contribution
limits | 2020 | 2021 |
|---|
| Traditional IRAs | Lesser of $6,000 or 100% of earned income
| Lesser of $6,000 or 100% of earned income
| | Roth IRAs | Lesser of $6,000 or 100% of earned income
| Lesser of $6,000 or 100% of earned income
|
| Additional "catch-up" limits
(individuals age 50 or older) | 2020 | 2021 |
|---|
| 401(k) plans, 403(b) plans, 457(b)
plans, and SAR-SEPs2 | $6,500
| $6,500
| | SIMPLE 401(k) plans and SIMPLE IRA
plans | $3,000 | $3,000 | | IRAs (traditional and
Roth) | $1,000 | $1,000 |
2 Special catch-up limits may also apply to 403(b) and
457(b) plan participants.
Employer contribution/benefit 3 limits| Defined benefit plan
limits | 2020 | 2021 |
|---|
| Annual contribution limit per
participant | No predetermined limit. Contributions based on amount
needed to fund promised benefits | No predetermined limit. Contributions based on amount
needed to fund promised benefits | | Annual benefit limit per
participant | Lesser of $230,000 or 100% of average compensation for highest three consecutive years
| Lesser of $230,000 or 100% of average compensation for highest three consecutive years
|
| Defined contribution
plan limits [qualified plans, 403(b) plans, SEP, and SIMPLE plans] | 2020 | 2021 |
|---|
| Annual addition limit per participant
(employer contributions; employee pre-tax, after-tax, and Roth contributions;
and forfeitures) (does not apply to SIMPLE IRA plans) | Lesser of $57,000 or 100% (25% for SEP) of participant's compensation
| Lesser of $58,000 or 100% (25% for SEP) of participant's compensation
| | Maximum tax-deductible employer
contribution [not applicable to 403(b) plans] | 25% of total compensation of employees covered under the plan (20% if self employed) plus any employee pre-tax and Roth contributions; 100% for SIMPLE plans
| 25% of total compensation of employees covered under the plan (20% if self employed) plus any employee pre-tax and Roth contributions; 100% for SIMPLE plans
|
3 For self-employed individuals, compensation generally
means earned income. This means that, for qualified plans, deductible
contributions for a self-employed individual are limited to 20% of net earnings
from self-employment (net profits minus self-employment tax deduction), and
special rules apply in calculating the annual additions limit. Compensation
limits/thresholds
| Retirement plan compensation
limits | 2020 | 2021 |
|---|
| Maximum compensation per participant
that can be used to calculate tax-deductible employer contribution (qualified
plans and SEPs) | $285,000
| $290,000
| | Compensation threshold used to
determine a highly compensated employee | $130,000 (when 2020 is the look-back year)
| $130,000 (when 2021 is the look-back year)
| | Compensation threshold used to
determine a key employee in a top-heavy plan | $1 for more-than-5% owners,
$185,000 for officers,
$150,000 for more-than-1% owners
| $1 for more-than-5% owners,
$185,000 for officers,
$150,000 for more-than-1% owners
| | Compensation threshold used to
determine a qualifying employee under a SIMPLE
plan | $5,000
| $5,000
| | Compensation threshold used to
determine a qualifying employee under a SEP plan | $600
| $650 |
| Traditional deductible IRA income
limits — Income phase-out range for determining
deductibility of traditional IRA contributions for
taxpayers covered by an employer-sponsored
plan and filing as: | 2020 | 2021 |
|---|
| Single | $65,000 - $75,000
| $66,000 - $76,000 | | Married filing jointly | $104,000 - $124,000 | $105,000 - $125,000
| | Married filing separately | $0 - $10,000
| $0 - $10,000
|
| Traditional deductible IRA income
limits — Income phase-out range for determining
deductibility of traditional IRA contributions for
taxpayers not covered by an employer-sponsored
retirement plan but filing a: | 2020 | 2021 |
|---|
| Joint return with a spouse who is covered by an
employer-sponsored retirement plan | $196,000 - $206,000
| $198,000 - $208,000
|
| Roth IRA compensation
limits — Income phase-out range for determining
ability to fund Roth IRA for taxpayers filing as: | 2020 | 2021 |
|---|
| Single | $124,000 - $139,000
| $125,000 - $140,000
| | Married filing jointly | $196,000 - $206,000
| $198,000 - $208,000 | | Married filing separately | $0 - $10,000
| $0 - $10,000
|
|
