If 2020 was a cliché, it might be “Expect the best, prepare for the worst.” Many of us will be ringing in the new year with resolutions of hope and optimism—expecting the best—but don’t forget to prepare for whatever the future may hold. If you have the good fortune of being employed as we’re nearing the end of the COVID-19 pandemic, one preparation you should consider is contributing to a retirement plan.
The IRS contribution limits for 2021 are little changed from those of 2020; the maximum contribution to a workplace 401(k) or other qualified plan remains $19,500 (plus a $6,500 catchup contribution if you are age 50 or older, for a total of $26,000).
This limit is for employee elective deferrals and does not include any non-elective contributions or matching contributions made by your employer; the overall limit for 401(k) contributions, which includes money from your employer or any other source, will rise from $57,000 to $58,000.
Click the thumbnail below to see the 2021 changes and how they’ll affect your contributions.
This material is being provided for educational and informational purposes only and is not intended as ERISA, tax, legal or investment advice. If you are seeking investment advice specific to your needs, such advice must be obtained on your own and separate from this educational material.