2021 Inflation Adjustments for Retirement Plans
Posted on Wednesday, November 04, 2020
ShareThe IRS has released the annual inflation adjustments for retirement plan related provisions. Because inflation has been low, the changes are very minimal.
IRA contribution limits remain at $6,000 with an additional $1,000 available for those 50 and over.
401(k) and 403(b) retirement deferrals also didn’t change. They remain at $19,500, with an additional $6,500 available for those 50 and over. This also applies to most 457 plans and the federal government’s Thrift Savings Plan.
Likewise, deferral limits for SIMPLE IRAs remain at $13,500 with a $3,000 over-50 catch up.
IRA Phase-out ranges generally went up $1,000 to $2,000, while the maximum for defined contribution plans also went up $1,000 to $58,000.
Social Security contributors will see those limits go up as well. The Social Security wage base increases from $137,700 to $142,800. For those under full retirement age who are receiving benefits and still working, the annual earned income ceiling increases from $18,240 to $18,960.
If you want more detail, you can review IRS Notice 2020-79 or contact your DWD accountant.
Posted in Tax Topics For Individuals
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