If you have questions about the 2021 IRS Retirement Plan Limits, I’m going to do my best today to answer them.
According to multiple sources you can cross reference below, the Employee 401(k) contribution will cap at $19,500 for 2021 and it will also have offer the ability to make a $6,500 catch-up contribution investment for anyone who is turning 50 years of age or older.
How Much Can I Put in My 401k in 2021?
$19,500. This is the same amount that was in place for 2020.
In the Kiplinger article referenced below, there was an overall sentiment that this was bad news, but on the bright side, there were some tidbits of good news that was announced late in 2020 as well for 2021 retirement contributors in the respect that more people will qualify for retirement tax breaks in 2021.
In fact, the maximum income levels that are permitted to make deductible contributions to various retirement programs, such as Roth IRA’s, Traditional IRA’s, were all increased.
Traditional IRA and Roth IRA 2021 limits also went unchanged in terms of their annual contribution levels and and stayed firm at $6,000. This amount was in place in both 2019 and 2020 tax years.
2021 Income Ranges
More Americans will qualify for tax breaks thanks to income ranges being altered for traditional IRA deduction, Roth contributions, and the Saver’s credit.
In terms of a traditional IRA contributor, the IRS will a
401(k) Contribution Limits for 2020 vs. 2021
As you can see by this graphic posted on Investopedia, the 401k contribution limits for 2020 and 2021 remain unchanged.
Of course, this is not financial advise. While we aim to help fellow American tax payers navigate the always changing landscape of retirement planning, we do encourage you to speak with your financial advisor. Of course, you likely won’t be swayed into some of the alternative investments that are offered out there that allow us to tap into emerging markets like cryptocurrency, or the ability to invest in physical precious metals by executing a 401k to gold rollover IRA, but speaking with a professional will keep you on the right path.
Once you are willing to make some investment choices of your own, you can opt to do what I did, and open a Self Directed IRA account that allows you to invest in the aforementioned investments in addition to real estate and many other alternative asset classes. I’ve had an absolute blast calling my own shots and getting involved in investments that I wouldn’t be able to get into otherwise. Feel free to contact me to find out the full benefits of controlling your own destiny.
Again, not financial advise.