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Updated employee benefit plan and IRA quick-reference table 2020 & 2021

Nov 01, 2020

The IRS has announced the cost-of-living adjustments applicable to dollar limitations for various qualified retirement plans and other amounts for 2021. Some pension plan limitations changed for 2021 because the increase in the cost-of-living index met the statutory thresholds that trigger their adjustments. While no changes were made to the elective deferral limit (including catch-up contributions), plan sponsors should verify that their administrative and payroll systems reflect the appropriate limits. Communications that specify benefit plan limits should be reviewed for accuracy before materials are given to participants. If you have any questions, or for more information about the 2021 cost-of-living adjustments, please contact your Wipfli relationship executive or benefit specialist.

Wipfli's Employee Benefit Services practice is an independent, fee-for-service consulting, record-keeping and compliance provider dedicated to helping clients meet their employee benefit needs. Wipfli has been providing qualified and non-qualified plan services for over 30 years.

2020 2021
Compensation limit (IRC Sec. 401(a)(17)) $285,000 $290,000
Defined benefit plan annual benefit limit $230,000 $230,000
Defined contribution plan annual contribution limit $57,000 $58,000
Social Security tax wage base $137,700 $142,800
Highly compensated employee compensation threshold $130,000 $130,000
Key employee officer compensation threshold $185,000 $185,000
SEP compensation threshold $600 $650
401(k), 403(b), 457(b) and SARSEPs
   
Elective deferral limit(2) $19,500 $19,500
Catch-up contribution(3) $6,500 $6,500
SIMPLE plan
   
Elective deferral limit(2) $13,500 $13,500
Catch-up contribution(3) $3,000 $3,000
IRA
   
Contribution limit(2) $6,000 $6,000
Catch-up contribution(3) $1,000 $1,000
Traditional IRA deduction phaseout range (AGI)
   
Single, head of household - active participant $65,000 - $75,000 $66,000 - $76,000
Married filing separate - any spouse participates $0 - $10,000 $0 - $10,000
Married filing joint - nonparticipating spouse $196,000 - $206,000 $198,000 - $208,000
Married filing joint - participating spouse $104,000 - $124,000 $105,000 - $125,000
Roth IRA contribution eligibility phaseout range (AGI)
   
Married filing joint $196,000 - $206,000 $198,000 - $208,000
Single, head of household $124,000 - $139,000 $125,000 - $140,000
Married filing separate - any spouse participates $0 - $10,000 $0 - $10,000
Retirement saver's credit limitation (AGI)
   
Married filing joint $65,000 $66,000
Head of household $48,750 $49,500
Married filing separate, single $32,500 $33,000

(1) This table has been updated based on IRS Notice (2020-79), October 26, 2020.
(2) This applies to the total of all elective deferrals an individual makes for the year to 401(k) plans, 403(b) plans, SARSEPs and SIMPLE plans.
However, deferrals to each SIMPLE plan in which the individual participates are also limited, as shown later in the table. 
(3) Catch-up contributions are available each year to individuals who reach age 50 by December 31.