Retirement Plan Limits 2021

Retirement Plan Limits 2021

Current and Historical Retirement Plan Limits

Limitation 2021 2020 2019 2018 2017
Plan Compensation $290,000 $285,000 $280,000 $275,000 $270,000
Highly Compensated Employee* $130,000 $130,000 $125,000 $120,000 $120,000
Individual Retirement Account ("IRA") $6,000 $6,000 $6,000 $5,500 $5,500
IRA Catch-up $1,000 $1,000 $1,000 $1,000 $1,000
SIMPLE IRA $13,500 $13,500 $13,000 $12,500 $12,500
401(k) Deferrals $19,500 $19,500 $19,000 $18,500 $18,000
401(k) Catch-up $6,500 $6,500 $6,000 $6,000 $6,000
Simplified Employee Pension ("SEP") $58,000 $57,000 $56,000 $55,000 $54,000
Defined Contribution with Catch-up $64,500 $63,500 $62,000 $61,000 $60,000
Defined Benefit Annuity $230,000 $230,000 $225,000 $220,000 $215,000
Defined Benefit Lump Sum at Age 62 $2.9 million $2.9 million $2.9 million $2.8 million $2.7 million

When a 401(k) or SEP is not enough, a Defined Benefit Plans has a much higher potential contribution limit. The Defined Benefit Plan limit varies on a number of factors, including the business owner's age and earned income. An actuarial calculation can determine how much you can contribute to a Defined Benefit Plan.





Need a Higher Retirement Plan Deduction?

Limitation 2021 2020 2019
Plan Compensation $290,000 $285,000 $280,000
Highly Compensated Employee* $130,000 $130,000 $125,000
Individual Retirement Account ("IRA") $6,000 $6,000 $6,000
IRA Catch-up $1,000 $1,000 $1,000
SIMPLE IRA $13,500 $13,500 $13,000
401(k) Deferral $19,500 $19,500 $19,000
401(k) Catch-up $6,500 $6,500 $6,000
Simplified Employee Pension ("SEP") $58,000 $57,000 $56,000
Defined Contribution w/ Catch-up $64,500 $63,500 $62,000
Defined Benefit Annuity $230,000 $230,000 $225,000
Defined Benefit Lump Sum at Age 62 $2.9 MM $2.9 MM $2.9 MM

* Highly Compensated Employees are determined using the prior year compensation. For example, an employee is generally Highly Compensated in 2022 if their 2021 compensation exceeds $130,000. Employees also may be Highly Compensated based on business ownership or attribution of business ownership.