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IRS Announces 2021 Cost of Living Adjustments to Retirement Plan Limits

  • Writer: Michelle Marsh
    Michelle Marsh
  • Nov 11, 2020
  • 1 min read

Updated: Nov 12


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Below is an outline of the newly released 2021 contribution limits, which will take effect on January 1, 2021.


There are not many increases in 2021. The key increases are:

  • Annual compensation limit is increased from $285,000 to $290,000

  • Annual additions limit for defined contribution plans is increased from $57,000 to $58,000

  • Social Security Wage Base is increased from $137,700 to $142,800

  • SEP Threshold is increased from $600 to $650

  • ESOP: Account Balance is increased from $1,150,000 to $1,165,000


The unchanged limits are as follows:

  • Salary deferral limit for 401(k), 403(b), and 457 plans is unchanged at $19,500

  • Salary deferral limit for SIMPLE IRA remains unchanged at $13,500

  • Catch-up contribution limits for 401(k) plans remains unchanged at $6,500 and for SIMPLE IRAs the limit remains at $3,000

If you have any questions about these changes please let us know. We are always here to help with your retirement plan needs!


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