On October 26, 2020, the IRS announced cost of living adjustments changing dollar limitations for pension plans and other retirement-related items for the tax year 2021. Here are the highlights:
| Plan Limits for Year: | 2021 | 2020 | 2019 |
| 401k, 403b, 457 Elective Deferrals | $19,500 | $19,500 | $19,000 |
| 401k, 403b, 457 Catch-Up Contribution Limit (age 50 or over) | $6,500 | $6,500 | $6,000 |
| Annual Defined Contribution Plan Limit | $58,000 | $57,000 | $56,000 |
| Annual Compensation Limit | $290,000 | $285,000 | $280,000 |
| Highly Compensated Employees | $130,000 | $130,000 | $125,000 |
| Key Employee Officer in a Top-Heavy Plan | $185,000 | $185,000 | $180,000 |
| SIMPLE Employee Deferrals | $13,500 | $13,500 | $13,000 |
| SIMPLE Catch-Up Deferral | $3,000 | $3,000 | $3,000 |
| SEP Minimum Compensation | $650 | $600 | $600 |
| Traditional IRA Contribution Limit | $6,000 | $6,000 | $6,000 |
| Traditional IRA catch-up Contribution Limit (age 50 or over) | $1,000 | $1,000 | $1,000 |
| Social Security Wage Base | $142,800 | $137,700 | $132,900 |
Internal Revenue Service Notice 2020-79.
Please note, annual contribution rates are based on the IRS 2021 retirement plan limitations and are subject to change. This material was created for educational and informational purposes only and is not intended as ERISA, tax, legal or investment advice.