2020 vs. 2021 retirement plan limits

Type of limitation
2020 limit 2021 limit
Elective deferrals to 401(k), 403(b) and 457(b) plans $19,500 $19,500
Annual benefit for defined benefit plans $230,000 $230,000
Contributions to defined contribution plans $57,000 $58,000
Contributions to SIMPLEs $13,500 $13,500
Contributions to IRAs $6,000 $6,000
Catch-up contributions to 401(k), 403(b) and 457(b) plans $6,500 $6,500
Catch-up contributions to SIMPLEs $3,000 $3,000
Catch-up contributions to IRAs $1,000 $1,000
Compensation limit for benefit purposes for qualified plans and SEPs $285,000 $290,000
Minimum compensation for SEP coverage $600 $650
Highly compensated employee threshold $130,000 $130,000
Minimum income for “key employee” status for top-heavy calculation $185,000 $185,000
Income subject to Social Security tax $137,700 $142,800


As always, we hope you enjoy this edition of our newsletter and we look forward to receiving your feedback. Should you have any questions regarding the information contained in the attached materials or our Employee Benefit Plan Services, please feel free to contact me directly.

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About the Author: Michael Giess

Michael is a Partner in the Audit and Business Advisory Services Group, joining Insero from PricewaterhouseCoopers. He has significant experience servicing private and public companies in the manufacturing, service, retail, and wholesale/distribution sectors. Michael also served as Director of Internal Audit for an upstate New York company where he was responsible for establishing an internal audit function and developing the overall audit plan.


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