IRS 2021 contribution limits for retirement plans (401k, 403b, 457)
The IRS has finalized the annual cost of living adjustments ( IRS Notice 2020-79 ), affecting 2021 contribution limits for retirement plans and retirement-related items. While most contribution limits remain unchanged from the 2020 numbers, HR managers should still inform participants of the 2021 limits and encourage employees to contribute. With the growing number of workers facing financial uncertainty, many are postponing retirement. This is a good time for your employees to review their contribution amounts and take advantage of all available retirement savings opportunities. Dollar contribution limits for 401(k), 403(b), and 457(b) plan elective deferrals are unchanged from the $19,500 limit for 2020. Catch-up contributions for those aged 50 or older also remain the same as last year's $6,500. Defined contribution plan limits received a bump to $58,000, an increase of $1,000 above the 2020 limit. The income limits for the Retirement Savings Contributions Credit (Saver's