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
Sincerely,
Capstone Investment Financial Group, LLC
719-477-9883
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