Retirement Plan Contribution Limits for 2021
Retirement Plans

Retirement Plan Contribution Limits 2021

January 23, 2021
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Participant Contribution Limits

It’s time to review the 2021 IRS retirement plan contribution limits for various types of plans including the 401(k), 403(b), 457(b), IRA, and SIMPLE IRA. For my purposes here, I’m looking only at defined contribution plans that allow participant contributions. SEP-IRA plans and traditional pensions are separate topics not covered here.

Generally, you are limited based on an aggregate of all the plans in which you participate. You might also have a lower limit applied because of factors specific to your employer’s plan.

Your employer and any third-party vendors (such as for an IRA) have to provide contribution information at the end of the year, so you will be able to total everything up when doing your taxes.

If you are age 50 or over at the end of 2021, you might also be able to make additional catch-up contributions. These catch-up rules and amounts are plan-type specific and are noted below where applicable.

If you want to change your payroll contribution to an employer-sponsored plan, you might have to go to HR. Don’t be surprised, however, if you’re able make your retirement plan elections online through a self-service portal.

Always review your election with your employer to make sure you do not exceed the annual limit if you want contribute the max allowed. Employers have an obligation to monitor employee contributions to make sure they don’t go over, but it never hurts to have it reviewed early in the plan year so there’s no unpleasant surprises.

If your employer is required to do certain testing across its entire employee population to evaluate how contributions are distributed, they may have to cap how much the highest paid employees can elect. You might have already been notified if this testing affects you.

The information provided here is only a summary. You should refer to the linked IRS pages for more comprehensive coverage. And, of course, consult your plan administrator and/or tax planner for specific advice.

You employer may set limits lower than the IRS maximum.

401(k) and Profit-Sharing Plans

The IRS covers the limits for these common plans in more detail on their site, including information on related versus unrelated employers, treatment of excess deferrals, and overall limits on contributions. Review this information and consult with your employer’s plan administrator if any of these situations apply in your case.

Are you at least 50 years old by the end of 2021? You might be able to elect an additional “catch-up” deduction in addition to the base amount.

Plan TypeDeferral Limit50+ Catch Up
SIMPLE 401(k)$13,500$3,000
2021 Elective Contribution Deferral Limits for 401(k) and SIMPLE 401(k) plans

403(b) Plans

The 2021 elective deferral limit for 403(b) plans is $19,500.

Catch-up contributions for these plans fall into two categories:

Employees Age 50+

As with 401(k) plans, if you’re age 50 or older by the end of 2021, you can contribute up to an additional $6,500 for the calendar year.

15 Years of Service

If allowed by your employer’s plan and you have at least 15 years of service with that employer, you might be eligible for a special catch-up election even if you are not yet age 50.

Your employer will have to evaluate whether or not you are eligible for this provision and, if so, how much you can elect under it. The calculation is based on your years of service and the total of any elective deferrals you have already made.

457(b) Plans

Your 2021 limit if you have a 457(b) plan is the lesser of

  • 100% of your includible earnings OR
  • The elective deferral limit of $19,500

Consult with your plan administrator if you’re interested in an additional catch-up contribution, including a special variety specifically defined for the 3 years prior the normal retirement age defined in the plan. Your employer may or may not include this provision in their plan design.


The 2021 employee contribution limit for SIMPLE IRA plans is $13,500.  A grand total limit of $19,500 for all plans applies if you contribute to more than one employer plan during the year.

Depending on how the plan is structured, those 50 or older by the end of 2021 might also be able to set aside a catch-up contribution of $3,000.

IRAs – Traditional and Roth

Total contributions to your traditional and Roth IRAs are limited to $6,000 with an additional $1,000 catch-up amount for those age 50 and over. These amounts have been unchanged since 2019.

If you or your spouse are covered by a plan at work, your deduction for your traditional IRA contribution may be limited by your Modified AGI and filing status.

If you are NOT covered by a plan at work and you’re married, your deduction for your traditional IRA may be limited by your Modified AGI and filing status if your spouse IS covered by a plan at their employer.

Roth IRA contributions can also be limited based on your Modified AGI and filing status.

The key point to remember here is that with a traditional IRA, how much you can deduct might be limited.  But with a Roth IRA, the contribution might be limited.

As always, check with your tax adviser for how any of these limits apply in your situation.

Retirement Plan Contribution Limits for 2021
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