The 2021 Retirement Plan Contribution Limits

Extra! Extra! The IRS has released the 2021 contribution limits. Since not everyone was awaiting them quite as eagerly as we were, here is a quick summary.

Here's a rundown of the 2021 limits:

Compensation and Benefit Limits 

• Annual compensation limit
  • Increases from $285,000 to $290,000
• Salary deferral limit for 401(k) and 403(b) plans
  • Remains unchanged at $19,500
• Salary deferral limit for SIMPLE IRA
  • Remains unchanged at $13,500
• Salary deferral limit for 457 plans
  • Remains unchanged at $19,500

• Catch-up contribution limit for 401(k) plans
  • Remains unchanged at $6,500

• Catch-up contribution limit for SIMPLE IRAs
  • Remains unchanged at $3,000 
• Annual additions limit for defined contribution plans
  • Increases from $57,000 to $58,000
• Annual additions limit for defined benefit plans
  • Remains unchanged at $230,000
• Social Security Wage Base
  • Increases from $137,700 to $142,800

Testing Limits

• Highly compensated employee
  
  • Remains unchanged at $130,000
• Key employee based on officer status
  
  • Remains unchanged at $185,000

• Key employee based on 1% owner compensation
  • Remains unchanged at $150,000

 You can find a chart of these limits from 2012 to 2021 here in the DWC Knowledge Center.