Tag Archives: Max retirement

2021 Retirement Contribution Limits – Most Popular No Changes!

With 2019 Taxes delayed filing to mid year this year 2020, it seems like tax season was a constant over the last 4-6 quarters. Add to that, there was a COLA (Cost of Living Adjustment) from 2019 to 2020 but not very many changes from this year, 2020 and next tax year 2021 and it seems like a puzzle.

Not to worry, here are the few changes from 2020 to 2021, again the most popular (bolded) by a long shot had very little adjustments

Limits on Benefits and Contributions20212020
401(k), 403(b), and 457 Plan Elective Deferrals$19,500$19,500
Defined Contribution Plans$58,000$57,000
Defined Benefit Plans$230,000$230,000
SIMPLE Plan Elective Deferrals$13,500$13,500
IRA$6,000$6,000
ROTH$6,000$6,000
“Highly Compensated” Definition$130,000$130,000
“Key Employee” Definition
Officer$185,000$185,000
1% Owner$150,000$150,000
Security Taxable Wage Base$142,800$137,700
Catch Up Contributions Age 50 And Older
401(k), 403(b), and 457 Plans$6,500$6,500
SIMPLE Plans$3,000$3,000
IRA$1,000$1,000
ROTH$1,000$1,000
Source https://definiti-llc.com/ and IRS.Gov/Retirement

Note, there are limitations on certain deductions from above as well as income oriented phase outs, please check with your tax professional for your specific sitiation.

Have a Great “New Deferral Limits” Day!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.

A Dallas Texas based fee only

Financial Planning Total Wealth

Management firm.

jkfinancialinc

street-cents

Time to confirm you are maxing your retirement plans — 401k, 403(b), 457 type plans!

At the end of the month, we will find ourselves in the last quarter of the year. Now is a terrific time to make sure you are on track to maxing your retirement  deferrals – If you are short, you have plenty of time to catch up!

Confirm you are maxing your retirement plans now

The maximum for those under age 50 is $18,000 for most traditional retirement plans. If you are age 50, the max is $24,000.  401k

We should be very near 75% of the way to these levels now!

Reasons we see the max is missed:

  • Just turned age 50 and on the old schedule
  • Volatile income – bonus, raise, or other
  • Change in job
  • Change in back office HR or plan providers

One last super handy tip – If you are only working a portion of the year for any reason, accelerate your deferral to hit those maximums early !

Have a Great Day!

John A. Kvale CFA, CFP

http://www.jkfinancialinc.com
http://www.street-cents.com
8222 Douglas Ave # 590
Dallas, TX 75225