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2021 Limits for IRAs, 401(k)s and More

2021 Limits for IRAs, 401(k)s and More

| February 10, 2021
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Saving money today is better thought of as paying your future self.

Help us help you!  Contribute to your IRA this year, and every year!  Don't put off saving for your retirement another moment... what you stash and invest today in your IRA can compound and grow in a tax-advantaged way... meaning (as long as the markets co-operate) you'll have much more money to spend later on in life.  As a reminder, you can still make 2020 contributions up until April 15, 2021.  So for those of you who tend to put these contributions off... don't procrastinate any longer!  In this ultra-low interest rate environment, having excess cash in your checking or savings account earns next to nothing.  So do yourself a favor and let us put your hard-earned money to work for you.

If you have any questions about your eligibility or contribution limits, call us at 210-694-5000 

On October 26, 2020, the Treasury Department released the 2021 adjusted figures for retirement account savings. Although these adjustments won’t bring any major changes, there are some minor elements to note.

401(k)s
The salary deferral amount for 401(k)s remains the same at $19,500, while the catch-up amount of $6,500 also remains unchanged. However, the overall limit for these plans will increase from $57,000 to $58,000 in 2021.1

Individual Retirement Accounts (IRA)
The limit on annual contributions remains at $6,000 for 2021, and the catch-up contribution limit is also unchanged at $1,000.2

Roth IRA
Roth IRA account holders will experience some slightly beneficial changes. In 2021, the Adjusted Gross Income (AGI) phase-out range will be $198,000 to $208,000 for couples filing jointly. This will be an increase from the 2020 range of $196,000 to $206,000. For those who file as single or as head of household, the income phase-out range has also increased. The new range for 2021 will be $125,000 to $140,000, up from the current range of $124,000 to $139,000.3

Although these modest increases won’t impact many, it’s natural to have questions anytime the financial landscape changes. If you’re curious about any of the above, give me a call at the number below for more information.

1. IRS.gov, October 26, 2020
2. IRS.gov, October 26, 2020
3. IRS.gov, October 26, 2020

The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite, LLC, is not affiliated with the named representative, broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information and should not be considered a solicitation for the purchase or sale of any security.

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