Blog
October 27, 2020
The Internal Revenue Service has announced the 2021 cost-of-living adjustments for various limits affecting employee benefit plans. The more common limits are detailed below for 2021 and 2020.
| 2021 | 2020 | |
| 401(k) & 403(b) Elective Deferrals | $19,500 | $19,500 |
| Catch-Up Contribution for participants age 50 and over | $6,500 | $6,500 |
| Defined Contribution Plans-IRC 415 (Including SEP and Keogh Plans) | $58,000 | $57,000 |
|
Maximum Benefit for Defined Benefit Plans Note: This is not the maximum contribution, it is the maximum benefit that can be funded. |
$230,000 | $230,000 |
| SIMPLE Retirement Plans | ||
| Elective Deferrals | $13,500 | $13,500 |
| Catch-Up Contribution for participants age 50 and over | $3,000 | $3,000 |
| Maximum Annual Compensation for Determining Contributions and Benefits | $290,000 | $285,000 |
| Compensation Limit for Key Employee Determination | $185,000 | $185,000 |
| Compensation Limit for Highly Compensated Determination | $130,000 | $130,000 |
| IRA Contributions | $6,000 | $6,000 |
| IRA Catch-Up Contribution | $1,000 | $1,000 |
A detailed listing of all of the adjusted limitations can be found at https://www.irs.gov/pub/irs-drop/n-20-79.pdf
If you should any questions about how these limits apply to you please contact Mark Flanagan of Aronson’s Compensation and Benefits Practice at 301.231.6257.