The IRS recently announced cost-of-living adjustments for 2021. Below is a list of some of the key annual limits that will apply to qualified retirement plans in 2021:
- Compensation limit used in calculating a participant?ÇÖs benefit accruals: increased to $290,000.
- Elective deferrals to 401(k) and 403(b) plans: remains unchanged at $19,500.
- Annual additions to a defined contribution plan: increased to $58,000.
- Catch-up contributions for employees aged 50 and over to 401(k) and 403(b) plans: remains unchanged at $6,500.
- Annual benefit limit for a defined benefit plan: remains unchanged at $230,000.
- Compensation dollar limit for defining a ?Ç£key employee?Ç¥ in a top heavy plan: remains unchanged at $185,000.
- Compensation dollar limit for defining a ?Ç£highly compensated employee?Ç¥: remains unchanged at $130,000.
View the full list of 2021 plan limits in Notice 2020-79 here.