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2021 Contribution Limits

  • Writer: Larry Kavanaugh, Jr.
    Larry Kavanaugh, Jr.
  • Nov 3, 2020
  • 1 min read

The IRS has announced cost of living adjustments affecting dollar limitations for pension plans and other retirement-related items for tax year 2020. For company retirement plans, the most recognized highlights include:


The following limits are going up for 2021:

  • The annual additions limit for defined contribution plans increases to $58,000

  • The annual compensation limit increases to $290,000

  • The Social Security Wage Base increases to $142,800

The following limits will remain the same for 2021:

  • The salary deferral limit for 401(k), 403(b), and 457 plans remains at $19,500

  • The catch- up contribution limits for 401(k) plans remains at $6,500

  • The annual additions limit for defined benefit plans remains at $230,000

  • The compensation limit for determining who is a highly compensated employee remains at $130,000

Review the full list of contribution limit changes below and share with your plan participants!


 
 

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Northeast Retirement Plan Advisors

950-A Union Rd Ste 31
West Seneca, NY 14224

Phone

716.674.6200 x 237 

This information was developed as a general guide to educate plan sponsors but is not intended as authoritative guidance or tax or legal advice. Each plan has unique requirements, and you should consult your attorney or tax advisor for guidance on your specific situation. In no way does advisor assure that, by using the information provided, plan sponsor will be in compliance with ERISA regulations.

Securities and Advisory services offered through LPL Financial. A registered investment advisor. Member FINRA SIPC.
 

The LPL Financial representative associated with this website may discuss and/or transact securities business only with residents of the following states: CO, FL, IN, MA, MD, MI, MN, MO, NC, NY, PA, SC

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