Retirement Contribution Limits for 2021
401(k), 403(b), 457 plans, and Thrift Savings PlanContribution limits for employees who participate in 401(k), 403(b), most 457 plans, and the federal government's Thrift Savings Plan remain unchanged at $19,500. The catch-up contribution limit for employees aged 50 and over remains unchanged at $6,500.
SIMPLE Retirement AccountsThe contribution limits for SIMPLE retirement accounts for self-employed persons remains unchanged in 2021 as well at $13,500.
A limit on annual contributions to an IRA remains at $6,000. The additional catch-up contribution limit for individuals aged 50 and over is not subject to an annual cost-of-living adjustment and remains $1,000.
Taxpayers can deduct contributions to a traditional IRA if they meet certain conditions; however, if during the year either the taxpayer or their spouse was covered by a retirement plan at work, the deduction may be reduced, or phased out, until it is eliminated, depending on filing status and income. If a retirement plan at work covers neither the taxpayer nor their spouse, the phase-out amounts of the deduction do not apply.
The phase-out ranges for 2021 are as follows:
- For single taxpayers covered by a workplace retirement plan, the phase-out range is $66,000 to $76,000, up from $65,000 to $54,000.
- Married couples filing jointly, where a workplace retirement plan covers the spouse making the IRA contribution, the phase-out range is $105,000 to $125,000, up from $104,000 to $124,000.
- An IRA contributor who is not covered by a workplace retirement plan and is married to someone who is covered, the deduction is phased out if the couple's income is between $198,000 and $208,000, up from $196,000 and $206,000.
- A married individual filing a separate return who is covered by a workplace retirement plan, the phase-out range is not subject to an annual cost-of-living adjustment and remains $0 to $10,000.
Roth IRAs An income phase-out range for taxpayers making contributions to a Roth IRA is $125,000 to $140,000 for singles and heads of household, up from $124,000 to $139,000. For married couples filing jointly, the income phase-out range is $198,000 to $208,000, up from $196,000 to $206,000. The phase-out range for a married individual filing a separate return who makes contributions to a Roth IRA is not subject to an annual cost-of-living adjustment and remains $0 to $10,000.
Saver's Credit. The income limit for the Saver's Credit (also known as the Retirement Savings Contributions Credit) for low and moderate-income workers is $66,000 for married couples filing jointly, up from $65,000; $49,500 for heads of household, up from $48,750; and $33,000 for singles and married individuals filing separately, up from $32,500.