Here Are the 2021 Contribution Limits for Your 401(k) and IRA
On Monday, the Internal Revenue Service released its new contribution limits for 401(k)s and IRAs, according to CNBC.
The IRS also released its annual inflation adjustments for 2021 tax provisions, including new income tax brackets and an increased standard deduction.
- 401(k) contribution limits are based on cost-of-living adjustments. The IRS determined that the contribution limit will remain at $19,500 for 2021, plus an additional $6,500 for individuals aged 50 or above.
- 403(b) contribution limits also remained the same at $13,500.
- Individual retirements accounts such as Roth or traditional IRAs also remained maxed out at $6,000.
Even though the contribution limits did not change, the income ranges to make Roth IRA contributions will increase next year. The income phase-out range for single individuals and heads of household will be $125,000 to $140,000. For married couples, it will be $198,000 to $208,000.