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2021 Retirement Plan Limits
Most of the key plan limits remain unchanged for 2021 from 2020 levels with the notable exception of the combined DC annual contribution limit, which increased to $58,000, and the annual compensation limit increase to $290,000. The ESOP maximum balance limit also increased. Below are the limits for 2019-2021 with changes highlighted. See IRS announcement IR-2020-79 for a complete list of all plan limitation amounts.
2019 | 2020 | 2021 | |
Elective Deferrals - 401(k), 403(b), and Most 457 Plans | $19,000 | $19,500 | $19,500 |
Catch-up Contribution | $6,000 | $6,500 | $6,500 |
DC Plan Combined Annual Contribution Limit | $56,000 | $57,000 | $58,000 |
Annual Compensation Limit | $280,000 | $285,000 | $290,000 |
Highly Compensated Employee Threshold | $125,000 | $130,000 | $130,000 |
Top Heavy Key Employee Dollar Limit | $180,000 | $185,000 | $185,000 |
SIMPLE Plan Contribution Limit | $13,000 | $13,500 | $13,500 |
SIMPLE Plan Catch-up | $3,000 | $3,000 | $3,000 |
Defined Benefit Annual Benefit Limit | $225,000 | $230,000 | $230,000 |
ESOP Maximum Balance Subject to Five-Year Distribution Rule | $1,130,000 | $1,150,000 | $1,165,000 |
ESOP Amount to Determine Lengthening Five-Year Distribution Period | $225,000 | $230,000 | $230,000 |
IRA Contribution Limit | $6,000 | $6,000 | $6,000 |
IRA Catch-Up | $1,000 | $1,000 | $1,000 |
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