2021 Retirement Plan Updates from IRS

Capstone Investment Financial Group

IRS just announced increases to retirement plan contributions for 2021, some didn’t increase, others did slightly. 

Below are the increases per the IRS increase for 2021:

Type of Account	2020 Limit	2021 Limit
Traditional IRA	$6,000	$6,000 unchanged
Roth IRA	$6,000	$6,000 unchanged
HSA – Single	$3,550	$3,600
HSA – Family	$7,100	$7,200
SIMPLE IRA	$13,500	$13,500 unchanged
SEP IRA	$57,000	$58,000
Most 401(k), 403(b), 457	$19,500	$19,500 unchanged
Total Defined Contribution	$57,000	$58,000

*Depending on Defined Contribution (401k), higher limits maybe allowed

*Some of the above have income requirements to meet limits above

The IRS allows a “catch up” contribution of an additional $1,000 to those 50 and over, which didn’t change from 2020 and an extra $6,500 in a 401(k) up which is unchanged from 2020 as well.

IRA’s have income limits for who can contribute and those income phase-out ranges have also been increase. 

Filer	2020 Phase Out	2021 Phase Out
Traditional IRA
Single Filer w/ Plan @ work	$65,000-$75,000	$66,000-$76,000
Married Joint w/ Plan @ work	$104,000-$124,000	$105,000-$125,000
Married Joint Only 1 w/ Plan Wk	$196,000-$206,000	$198,000-$208,000
Roth IRA
Single and Head of Household	$124,000-$139,000	$125,000-$140,000
Married Joint	$196,000-$206,000	$198,000-$208,000

As always, would love to talk with you about how to implement these changes into your financial plan to provide a clear path to your financial goals.          

Ryan Turbyfill, MBA

**This is not deemed to be Tax or Legal Advise**

Source: https://www.irs.gov/newsroom/income-ranges-for-determining-ira-eligibility-change-for-2021

https://www.irs.gov/pub/irs-drop/rp-20-32.pdf

https://www.forbes.com/sites/ashleaebeling/2020/10/26/irs-announces-2021-retirement-plan-contribution-limits-for-401ks-and-more/?sh=59b1dab0215f