Page 1 of 2 2018/2019 dollar limitations for retirement plans
2020/2021 dollar limitations for retirement plans
Some new limitations will apply to retirement plans and other benefit plans in 2021 as a result of cost-of-living adjustments made by the IRS and the Social Security Administration. The limits for 2021, as well as the 2020 limits, are as follows:
Account Types IRA
SIMPLE IRA
SEP IRA
401(k), SARSEP, 403(b) and Governmental 457(b) Profit Sharing, 401(k) and Money Purchase Pension Profit Sharing, 401(k), SEP and Money Purchase Pension 401(k), SARSEP, 403(b) and Governmental 457(b) Profit Sharing, 401(k) and Money Purchase Pension Defined Benefit
Traditional and Roth IRA contribution limit Catch-up limit for individuals age 50 and older Elective deferral limit Catch-up limit for individuals age 50 and older Maximum employer match ($1 for $1 match on the first 3% of employee compensation deferred). Maximum employer non-elective contribution (2% of employee's compensation, up to $280k in 2019 and $285k in 2020) Catch-up deferral is also matched by employer if individual is age 50 or older. Maximum SEP contribution SEP compensation exclusion Elective deferral limit Catch-up limit for individuals age 50 and older Defined contribution limit (415(c) limit)
Employee annual compensation limit
Highly compensated employee limit (no requirement for 5% owner)
Top-heavy plan key employee compensation limit
Maximum annual benefit at retirement
2020 Limit 2021 Limit
$6,000 $1,000 $13,500 $3,000 $13,500
$6,000 $1,000 $13,500 $3,000 $13,500
$5,700
$5,800
$3,000
$3,000
$57,000 $600 $19,500 $6,500 $57,000
$58,000 $650 $19,500 $6,500 $58,000
$285,000 $290,000
$130,000 $130,000
$185,000 $185,000
$230,000 $230,000
Investment and insurance products offered through RBC Wealth Management are not insured by the FDIC or any other federal government agency, are not deposits or other obligations of, or guaranteed by, a bank or any bank affiliate, and are subject to investment risks, including possible loss of the principal amount invested.
Page 2 of 2 2020/2021 dollar limitations for retirement plans, continued
Modified Adjusted Gross Income (MAGI) phase-out ranges for traditional IRA deduction when taxpayer is covered by a retirement plan at work
Filing status
2020 Limit
2021 Limit
Single or head of household
$65,000 - $75,000 $66,000 - $76,000
Married filing jointly
$104,000 - $124,000 $105,000 - $125,000
Married filing jointly for non-covered spouse with a spouse who is an active participant
$196,000 - $206,000 $196,000 - $208,000
MAGI phase-out ranges for Roth IRA annual contributions
Filing status
2020
2021
Single or head of household
$124,000 - $139,000 $125,000 - $140,000
Married filing jointly
$196,000 - $206,000 $198,000 - $208,000
Social Security
2020
2021
Social security taxable wage base
$137,700
$142,800
Maximum earnings for individuals under normal retirement age before Social Security benefits are reduced. One dollar in benefits will be withheld for every $2 in earnings above the limit.
$18,240 ($1,520/mo) $18,960 ($1,580/mo)
Maximum Social Security benefit at social security full retirement age
$3,011
$3,148
529/Gift Tax Exclusion
Filing status
2020
2021
Single or head of household
$15,000
$15,000
Married filing jointly
$30,000
$30,000
Health Savings Accounts (HSAs)
2020
2021
Maximum contribution limit
Single
$3,500
$3,600
Family
$7,100
$7,200
Catch-Up (sgr 55 by the end of the year)
$1,000
$1,000
Minimum annual deductible for High Deductible Health Plan (HDHP)
Single Family
$1,400 $2,800
$1,400 $2,800
HDHP maximum out-of-pocket expenses
Single
$6,900
$7,000
Family
$13,800
$14,000
RBC Wealth Management does not provide tax advice. All decisions regarding the tax implications of your investments should be made in consultation with your independent tax advisor.
? 2020 RBC Wealth Management, a division of RBC Capital Markets, LLC, Member NYSE/FINRA/SIPC. All rights reserved.
20-20-03785_20176 (11/20)
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